Autorité Des Marchés Financiers Issues Third Publication In Its "Risk And Trend Mapping" Series: Private Equity In Europe: Which Features For This Rapidly Growing Market?

Europe's private equity market has expanded remarkably over the past decade. This rapid growth is reflected in both the amount of capital raised and the investments made. In 2006, European private equity investors raised €90 billion, compared with €48 billion in 2000 and just €8 billion in 1996. Private equity covers different types of investment, including venture capital, which finances new and expanding companies, and buyouts, used to finance the acquisition of existing companies, most of which are not listed on a stock market.

In view of these developments, the AMF thought it would be useful to publish an educational study aimed at:

outlining the organisational and operating principles of the private equity market;
highlighting the changing pattern of activity in this market in Europe;
assessing both the return on equity capital and its determinants, using available statistics and academic research;
mapping the potential risks to financial stability and investor protection.

The study also seeks to encourage reflection among regulators by raising the following issues:

asset valuation;
market assessment of credit risk and, where appropriate, the role of credit rating agencies;
comparative competitive merits of the various financing techniques available to corporates;
fund listing and transparency rules.

To download a copy of Issue No 3 of "Risk and Trend Mapping", titled Private equity in Europe: Which features for this rapidly growing market?, click here