Private equity activity in 2022

Claire Chabrier, President of France Invest, comments: “The year 2022 was in many ways affected by external factors. Our industry was impacted in the second half of the year, notably by a slowdown in fundraising. Nevertheless, the overall performance for 2022 remains positive: the French private equity industry remains active and continues to finance start-ups, SMEs and mid-caps, so they can be more robust and more successful. It is perfectly equipped to navigate in uncertain times when companies must weather repeated crises while continuing to innovate and accelerate their economic and ecological transitions. At the same time, we note the renewed interest of individual investors and family offices in our industry: they represent 19% of fundraising. We are already playing our role as a bridge between savings and the financing of the economy and will continue to do so.“

1. Global data for private equity players in 2022: investments are maintained, more businesses and infrastructure projects are supported, but fundraising is slowing down

• In 2022, French private equity and infrastructure players invested €36bn (+1% compared to 2021) in 2,857 businesses and infrastructure projects (+15% compared to 2021).
• The main sectors funded are industry, digital, health (including biotechnology) and renewable energy.
• At the same time, €41.5 billion in savings were raised from institutional and private investors (-1% compared to 2021).
• The attractiveness to international investors is confirmed, who represent 55% of the funds raised (compared to an annual average of 49% over the last 10 years).
• These apparently stable figures compared to 2021 nevertheless reflect a significant shift between the first and second half of the year (details below). In particular, the slowdown in fundraising in the second half of the year reverses the historical trend of a more active second half of the year than the first.

2. Focus on the private equity market (excluding infrastructure): slightly lower investments and a higher number of businesses supported

Investments

• In 2022, the amounts invested reached €24.7bn (-9% compared to 2021). This slight decrease is explained by the reduction in investments of over €100m.
• Primary transactions (companies opening their capital to a France Invest member for the first time) represent 48% of the amounts invested over the year (identical to the annual average over the last 10 years).
• 2,681 companies were assisted in 2022 (+4% compared to 2021). This very high level is therefore not affected by the reduction in the number of operations in the second half of the year.
• A slight contraction inthe amounts invested in the buyout segment, particularly for deals of over €100m, is partly explained by the sharp drop in bank financing in the second half of the year, which was a limiting factor for the implementation of certain large deals.
• It should be noted that transactions in the venture and growthsegments are up by +11% in terms of amounts invested and +13% in terms of number compared to 2021.
• The top three sectors invested in are: industry, digital and health, in line with the trend of recent years.

Fundraising

• Overall, fundraising increased slightly to €25.4bn, driven in particular by a number of fundraising projects in excess of €1bn.
• However, fundraising fell between the first and second half-year (-50 %). While historical data shows a more dynamic second half of the year, the second half of 2022 reached its lowest level since H2 2017.
• Investors are still very diversified and international fundraising remains at a high level of 40 %.
• As in 2021, individuals and family offices, with 19% of direct and life insurance subscriptions, confirm their interest in private equity (excluding infrastructure). These funds were raised directly or via unit-linked life insurance (€4.8bn). Institutional investors are of course still in the majority (82%), but this development confirms the trend observed over the last two years.

3. Focus on the infrastructure market: very high levels of investment driven by the environmental transition and mobility/transport

Investments

• Investments are on the rise at €11.6bn (+30% compared to 2021), driven again in 2022 by financing for renewable energies (€3.9bn and 61% of projects supported in terms of number).

Raising capital

• The level of fundraising decreased to €16bn (-7% compared to 2021), due to the decrease in large-scale fundraising.
• As observed historically, the main investors are pension funds, funds of funds and insurers, which account for 80% of the amounts raised.
• 80% of capital is raised internationally (compared to an annual average of 69% over the last 4 years).

The overall amounts for 2022 for
private equity (including infrastructure) and private debt:
€53.7bn invested and €52.8bn raised