Private Equity at Work

Invest Europe
Private Equity at Work

Invest Europe issued a report Private Equity at Work measuring the impact of the private equity industry on employment and job creation in Europe in 2018, compared to 2017. Over time, the data measuring the private equity contribution to the economy will expand to create a comprehensive picture of private equity contribution to jobs and the economy that those jobs support. Data is collected via the European Data Cooperative platform, which is jointly owned and run by Invest Europe and other European private equity & venture capital national associations. Croatian Private Equity and Venture Capital Association (CVCA) participate in the collection of the data and will expand efforts in collecting the data measuring the private equity’s industry impact on employment. Mirna Marovic, CVCA’s President, stated: “While we cannot account now precisely for the private equity industry’s contribution to the job creation to the Croatian economy, we shall make an effort to measure this impact in the future. The initial findings presented here below show that the private equity industry is pivotal for job creation and acts as an engine of growth for the economy. “

Private equity is one of the most important segments of the European economy present in every region and every major business sector. It provides an alternative investment mechanism to the traditional banking system who considers the risks too great. Private equity companies help to build a better business by strengthening management, improving operations, and expanding into new markets. Private equity and venture capital firms support millions of high-value jobs driving prosperity and growth in the process by making long-term investments into small, medium, and large companies.

Private equity builds successful businesses by giving them the equity and know-how necessary to expand the business and create new jobs. In 2018, a total of 173,124 net jobs were created by private equity-backed companies. Employment levels at those companies increased by 5.5% in the same year, five times the 1.1% growth achieved by businesses in Europe on average.

“Invest Europe’s Private Equity at Work demonstrates just how deeply ingrained private equity is in the economic and social fabric of Europe. The industry is a major supporter of employment across the whole continent. Not only do its companies create jobs, but they do it at a much faster rate than the average European business,” says Eric de Montgolfier, CEO of Invest Europe. “Private equity is an engine for growth. And growth is an engine for job creation.”

In 2018, a total of 10.5 million people were employed at private equity-backed businesses in Europe, representing 4.5% of Europe's total 234 million workforces. That year, there were 22,659 companies in Europe backed by private equity across all industry sectors and all regions.
A total of 14,500 private equity-backed SMEs employed 874,481 people across Europe at the end of 2018. These companies increased employment at a rate of 10% in 2018.

In 2018, the largest number of people were employed in ICT (1,725,918), Biotech & Healthcare (933,631) and in Energy & Environment sector (254,274).
Private equity and venture capital are supporting innovation and business expansion, which in turn is driving economic growth and job creation.
The number of PE-backed CEE companies increased year-on-year by 50% to 398 in 2018 – the second-highest level ever recorded. This was driven by a significant increase in venture capital-backed companies.

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