DC Advisory's European Private Equity Mid-Market Monitor: Q2 2023 & Outlook

Resilient sectors and technology provide opportunities as pressure builds to deploy capital

In Q2 2023, the European private equity market continued to remain depressed given tough macroeconomic conditions and persisting high financing costs. However, amidst this backdrop, handfuls of assets in resilient sectors (particularly Infrastructure Services, Industrials and IT Services), continued to transact. Fundraising across the continent remains challenging, however, the continued resilience in fundraising for megafunds is further evidence for the growing preference of LPs to deploy larger cheques into larger fund vehicles. 

Ultimately, we anticipate that the European private equity market will remain subdued for the remainder of 2023 as inflation and interest rates in Europe continue to remain sticky. However, with significant dry powder still available in the market, sponsors will come under increasing pressure to deploy capital and to keep on track with investment curves. This sentiment suggests that we could experience a busier H1 2024, as sponsors look to deploy capital into processes they have spent significant time prepping for throughout the remainder of 2023.

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Read the regional commentary below

GP Secondaries

“Opportunities for portfolio companies to pursue accretive acquisitions has created the need for additional capital and time to capitalize on value creation initiatives”

Read the GP Secondaries commentary by Michael Wieczorek, Sabina Sammartino and Ludovic Douge here

Benelux

“We see fundamental growth niches prevailing in Technology, ESG and Infrastructure, whilst stable, late cyclical sectors such as Industrials are being prepared for sale again”

Read the Benelux regional commentary by Paul de Hek, Robert Ruiter and Verner Uiterwijk here

Central and Eastern Europe (CEE)

"Although reduced pricing pressure creates a favorable environment for acquisitions, securing financing remains a challenge"

Read the CEE regional commentary by Tod Kersten and Mateusz Prudzynski here

Germany

“In Germany, talks of increasing deal activity are ongoing while pressure in the pipeline is building up”

Read the Germany regional commentary by Stefan Jaecker, Edward de Stigter and Sven Lange here

France

“We expect the remainder of 2023 to be more active, especially in non-cyclical sectors including Business & Tech-Enabled Services, and the hydrogen industry”

Read the France regional commentary by Francois Prioux here

Italy

“We have seen increased deal values of Italian investments abroad, due to Italian companies prioritizing expansion into foreign markets”

Read the Italy regional commentary by Giuliano Guarino and Alberto Tack here

Spain

"Private equity firms focused on buy-and-build strategies, consolidation, and strategic opportunities, with trade buyers being more active in transactions”

Read the Spain regional commentary by César García here

UK

“Trade buyers have taken advantage of a more cautious mid-market investor landscape and are taking the opportunity to acquire businesses”

Read the UK regional commentary by Andrew Strudwick and Tara Stowe here

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