Europe, CEE, and Romania: Where is Investment Fund Money Flowing?

Anca Manitiu, Deputy CEO of Impetum Group - one of the biggest private equity managers in Romania - analyzes the recent trends and numbers in the European and regional private equity market.

Europe's alternative investment fund market - funds investing in private companies, startups, and growth projects - is transforming. While capital previously flowed freely to innovative and high-potential businesses, 2024 presented new challenges and opportunities for those who know where to look.

Europe: Mega-Funds Dominate

In 2024, private equity and venture capital funds invested over €126 billion in European companies, a 24% increase year-over-year. However, access to this capital was concentrated: over 60% went to just 14 mega-funds, and the number of new fund managers hit a decade low. The market is consolidating around large, established players.

Despite this concentration, investor appetite remains strong. Buyouts (acquiring and streamlining mature companies to grow their value and subsequently sell them) accounted for nearly 70% of total investments, with the technology sector in the lead. U.S. investors also played a major role, being involved in one of every five European deals.

CEE: Untapped Potential on the Periphery

Central and Eastern Europe (CEE) remains on the periphery of major capital flows, receiving only 2% of European investment. The absence of large institutional investors like pension funds or insurance companies limits funding. While notable deals like the sale of Budapest Airport occurred, strategic companies, rather than startups or innovative businesses, continue to attract the largest sums.

Sources: Pitchbook, Invest Europe, internal analysis

Romania: High Activity, Small Deals

Romania's alternative investments fund market is dynamic but small compared to its neighbors. In 2024, Romania-focused estimated funds raised under €1 billion. Deal volume is significant, but values are modest. Key sectors include energy, financial services and real estate, with local funds employing 'buy-and-build' strategies – buying small businesses to create regional leaders.