European private equity (PE) activity bifurcated in Q2 2022, with deal value reaching one of the highest levels on Unquote record and volume sinking to its lowest in at least four years. This is a consequence of a significant slowdown in venture capital (VC) activity as new macroeconomic and market dynamics emerge, with VC sitting further out along the risk curve.

Key findings include:

• Overall European PE: European PE deal value was up by nearly 10% in Q2 2022 to EUR 102.6bn, the highest level of activity since Q3 2021. At the same time, PE deal volume fell to a four-year low of 720 deals in Q2 2022, down 23% on Q1. As value has risen and volume has fallen, the average deal size was up to EUR 142.5m – the highest figure since 2018 and 43% up on Q1 2022.
• Buyouts: Aggregate European buyout value surged to EUR 83.2bn in Q2, up by a full 27% on Q1 and the highest level in at least four years. This came despite volume easing off by 8% to 280 buyouts in the same period. The average buyout deal value in Q2 2022 soared to EUR 297.2m, up 28% on the previous quarter and a new high watermark.
• Growth capital: Growth capital deals fell by 27% in Q2 to 377 transactions versus 515 in Q1. Total growth deal value took a similar turn, falling by 24% to EUR 18.2bn. While this represents the lowest figure since Q4 2020, it is still well above pre-pandemic levels.
• Early-stage: The 63 early-stage deals recorded in Q2 represents a 46% drop on the previous quarter, as VCs sat on the sidelines. Deal value was also down by as much as 70% to EUR 1.2bn in Q2 – though Q1 was an outlier, and the second quarter is broadly in line with the pre-pandemic average.

The Private equity barometer is published in association with abrdn.