Despite major economic concerns in Europe, private equity realised more investments in 2011 than in each of the previous four years according to research by Ernst & Young.
The study, which has been carried out annually since 2005, looks at European-based businesses owned by private equity firms with an enterprise value of €150 million at the time of investment.
Overall there were 83 exits that met the study's criteria and 90 percent of these realised investments generated a positive return for investors. The study also shows the gross return on these investments outperformed investments in comparable public companies.
Trade buyers accounted for the most growth in realised volume. This was their biggest showing in recent years making up 39 percent of all the exits.
The largest and best performing sectors for realisation were business services, retail and health care.
Behind this performance, analysis has shown that private equity was able to grow productivity, which the study measures as earnings before interest, tax, depreciation and amortisation per employee, of the businesses. Employment has also grown by 2.2 percent over the seven years since the studies began.
Private equity builds more productive businesses but not at the expense of employees as critics would claim, argued Dörte Höppner, secretary general of the European Venture Capital and Private Equity Association, in the report.
The study adds evidence that private equity plays a positive role in European society, added Höppner.