Backing Europe’s SMEs
Commentary by Michael Collins, CEO, Invest Europe
As the voice of European private capital, Invest Europe recognises the challenges that businesses face as they seek to grow. On behalf of our members, I applaud the businesses feature in this year’s 1000 Companies to Inspire Europe for their achievements.
When companies like those in this report need capital, private equity and venture capital can be a critical source of funding. In 2016, according to Invest Europe’s research, European private equity invested €53.7 billion into almost 6,000 companies, 83% of which were SMEs.
Since 2008, private equity has invested €400 billion into 35,000 European companies. As companies have faced challenges securing finance, private equity has been part of the solution, connecting large institutional investors with capital to deploy and SMEs that need investment.
One reason private equity is so important – and differentiated from other forms of finance – is that investment managers provide much more than just funding to companies. Private equity firms provide business expertise, market insight, established professional networks, ideas and practical know-how that results in businesses being better equipped for global success, whatever the political or macro-economic backdrop.
The European Commission has recognised the critical role of private equity to SMEs in its Capital Markets Union programme. New measures, such as a venture capital fund of funds, will increase the flow of investment into young companies and encourage more innovation in Europe.
Private equity’s commitment to SMEs does not stop at capital and operational improvement. Managers drive responsible investment, promoting advances on environmental, social and governance issues. These help businesses not only to deliver financial returns for investors, but also to be conscious of – and manage – their wider impacts.
Better businesses, higher employment, stronger growth and responsibility are at the heart of private equity’s contribution. Like the businesses highlighted in this report, we need the right underlying conditions for business and investment to prosper and a level playing field for all companies and investors. We use all the tools at our disposal to get that message across – public affairs engagement, world-class data, promotional activities and events, such as Invest Week, which speak directly to policymakers, investors, opinion formers and entrepreneurs.
The companies listed in this report show what can be achieved when investment, skills and ideas are aligned. They serve as encouragement to us all that Europe’s SMEs have a bright future. With our support they can help to build a strong, sustainable European economy.