Key Takeaways
- • European private equity and venture capital funds raised €67.6bn in the first half of 2026, up from a revised €63.8bn a year earlier, according to Invest Europe, with buyouts accounting for 79% of the total.
- • Investment into European companies fell 35% to €43.1bn, while divestments at original cost dropped 40% to €13.2bn, their lowest half-year level since 2020.
- • Buyout fundraising rose 29% to €53.6bn even as buyout investment fell 42% to €24.5bn, highlighting a widening gap between capital raised and capital deployed.
- • Venture capital investment rose 11% to a record €11.5bn for the first half, driven by the UK and Ireland, despite fewer companies receiving funding.
- • Continuation fund fundraising fell 78% to €2.4bn from a record €11.3bn, and growth-stage fundraising dropped 58% to €4.2bn, its lowest half-year total since 2016.
Summary
European private equity and venture capital fundraising rose 6% in the first half of 2026 to €67.6bn, according to new figures from industry association Invest Europe, despite a sharp contraction in dealmaking and a 40% slump in divestments. The data point to a growing disconnect between investor appetite for new funds and managers' ability to deploy capital and realise existing investments.
Buyout strategies drove fundraising. Buyout funds raised €53.6bn, up 29% from €41.5bn a year earlier, and accounted for 79% of all capital raised in the period, compared with about 65% in the first half of 2025. Over the same period, buyout investment fell 42% to €24.5bn. Growth capital faced a harder environment on both sides of the business: fundraising fell 58% to €4.2bn, its lowest half-year total since 2016, and investment declined 48% to €6.8bn. Venture capital fundraising was more resilient, slipping 3% to €7.9bn.
Exits represent one of the clearest pressures on managers. Divestments at cost fell from €22bn to €13.2bn, the lowest half-year level since 2020, with buyout-stage exits at €8.8bn and growth-stage exits at €2.6bn. Sponsor-to-sponsor sales fell to 35% of exits from more than 40% in each of the previous two years, while trade sales accounted for 29%. Public offerings rose to 13% of exits from 7%, reaching a double-digit share for the first time since the second half of 2021. Invest Europe measures divestments at original cost rather than sale proceeds and cautioned that its first-half figures are preliminary.
Continuation funds also slowed. Fundraising for European continuation vehicles fell 78% to €2.4bn from a record €11.3bn, and investment through them declined 65% to €1.3bn. Invest Europe's sentiment survey found that more than half of GPs were extending, or considering extending, holding periods, and the firm noted the early-2025 comparison was exceptionally strong.
Venture capital was the main exception to the broader decline in investment. Investment into European venture-backed companies rose 11% to €11.5bn, the highest first-half total recorded by Invest Europe, although fewer businesses received funding. Later-stage venture funding reached €5.9bn from €4.0bn, and deeptech investment rose 35% to €8.5bn. Defence-related investment more than doubled to €2.7bn.
Investor sentiment is shifting. A separate Invest Europe and Arthur D Little survey found that 43% of surveyed LPs expect to increase European allocations over the next three years because of Washington's trade stance, while 30% expect to reduce US allocations. Invest Europe chief executive Eric de Montgolfier said Europe's stability and predictability were attracting capital. The association noted, however, that stronger fundraising and LP sentiment have not yet translated into a broad recovery in deployment or exits.
Buyout strategies drove fundraising. Buyout funds raised €53.6bn, up 29% from €41.5bn a year earlier, and accounted for 79% of all capital raised in the period, compared with about 65% in the first half of 2025. Over the same period, buyout investment fell 42% to €24.5bn. Growth capital faced a harder environment on both sides of the business: fundraising fell 58% to €4.2bn, its lowest half-year total since 2016, and investment declined 48% to €6.8bn. Venture capital fundraising was more resilient, slipping 3% to €7.9bn.
Exits represent one of the clearest pressures on managers. Divestments at cost fell from €22bn to €13.2bn, the lowest half-year level since 2020, with buyout-stage exits at €8.8bn and growth-stage exits at €2.6bn. Sponsor-to-sponsor sales fell to 35% of exits from more than 40% in each of the previous two years, while trade sales accounted for 29%. Public offerings rose to 13% of exits from 7%, reaching a double-digit share for the first time since the second half of 2021. Invest Europe measures divestments at original cost rather than sale proceeds and cautioned that its first-half figures are preliminary.
Continuation funds also slowed. Fundraising for European continuation vehicles fell 78% to €2.4bn from a record €11.3bn, and investment through them declined 65% to €1.3bn. Invest Europe's sentiment survey found that more than half of GPs were extending, or considering extending, holding periods, and the firm noted the early-2025 comparison was exceptionally strong.
Venture capital was the main exception to the broader decline in investment. Investment into European venture-backed companies rose 11% to €11.5bn, the highest first-half total recorded by Invest Europe, although fewer businesses received funding. Later-stage venture funding reached €5.9bn from €4.0bn, and deeptech investment rose 35% to €8.5bn. Defence-related investment more than doubled to €2.7bn.
Investor sentiment is shifting. A separate Invest Europe and Arthur D Little survey found that 43% of surveyed LPs expect to increase European allocations over the next three years because of Washington's trade stance, while 30% expect to reduce US allocations. Invest Europe chief executive Eric de Montgolfier said Europe's stability and predictability were attracting capital. The association noted, however, that stronger fundraising and LP sentiment have not yet translated into a broad recovery in deployment or exits.
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