The Insight: State of the European Private Equity Industry 2025 (Invest Europe)

Summary

• Capital raised by European PE and VC funds reached €54 billion in the first half of 2025, representing a 20% decline compared to the same period in 2024.p.6
• UK & Ireland fundraising rose by 60% compared to the previous six months and accounted for roughly 45% of total capital raised in Europe.p.6
• Capital under management reached €1.25 billion at the end of 2024, while uninvested capital (dry powder) remained flat at €414 billion.p.12
• Defense became the leading sector for expected investment growth, with 74% of GPs expecting higher spending over the next 12 months.p.16

Key insights

1. The proportion of GPs claiming no interest in targeting retail investors dropped from 22% in 2022 to 10% in 2025.p.6
2. Investment strategy remains the primary differentiator for PE firms, cited by 77% of GPs as most critical over the next two to three years.p.8
3. Uncertainty surrounding US policy and tariffs led 40% of LPs to expect higher capital commitments to European funds.p.10
4. Secondary buyouts represent the largest area of expected transaction opportunity, with 68% of GPs anticipating increased activity.p.13
5. Continuation funds have emerged as a primary alternative liquidity path, with 67% of GPs expecting higher activity in the next 12 months.p.20
6. Artificial intelligence has become the top daily operational focus for fund managers, with 94% of GPs planning to increase AI integration.p.22