We are pleased to share with you the 2023 edition of the CMS European Private Equity Study, a comprehensive analysis of hundreds private equity deals CMS advised on across Europe in 2022 and 2021.
Deal activity remained strong until Q3 2022, but experienced a significant drop in Q4.
New investments accounted for 85% of PE deals analysed, with fewer exits and secondary buy-outs in 2022 compared to 2021.
Bidding processes decreased in 2022, potentially due to less involvement of PE funds on the sell-side.
Entry into new markets was the most common deal driver (64% of deals), while digitalisation was no longer a deal driver.
Technology, media, and telecoms (TMT) was the busiest sector, followed by Real Estate & Construction and life sciences.
Use of MAC clauses decreased to 10% in 2022, compared to 15% in 2021.
Fewer FDI approvals or clearances were sought in 2022 (8%) compared to 2021 (15%).
W&I insurance played a prominent role in PE M&A transactions, increasing with deal value.
Locked box mechanisms for setting purchase price were preferred in 80% of PE deals, while purchase price adjustments decreased.
Earn-out provisions increased overall in 2022 but were more common in smaller deals than higher value deals.
ESG considerations have not yet featured in legal due diligence or transaction documents.
Management incentive schemes saw an increase saw shorter vesting periods, increased management allocation but tightened leaver provisions.
Overall, there were buyer-friendly developments in some deal metrics, such as the use of “tipping” baskets.
HVCA Publications 2022
Overview of Impact Investing in CEE Region - Dr. Eszter Hubbes, Hubbes & Kovács Attorneys at Law Budapest(1.0MB | pdf)
Overview of the Impact Investing sector in the CEE region - CEE Impact Survey
Post Milton Friedman Economy: Impact investing in progress
HVCA Publications 2021
This yearbook is for you. We have spent a lot of time and made a great effort to highlight the role of the Hungarian venture capital and private equity sector, the role of HVCA in this field, the three decades of success of our association, and the added value we contribute to the development of the Hungarian and regional economy.
Venture capital and private equity financing has become an important mechanism for the development and radical transformation of companies worldwide in recent decades. Nevertheless, the venture capital and private equity sector covers only a relatively small proportion of economic activity related to corporate financing. The two basic areas of venture capital and private equity industry are venture capital and buyouts. They play a key role in financing firms in radically different situations. The importance of venture capital and private equity as a financing intermediary channel can be measured in several ways. Its significance can be compared to the total amount of corporate financing or to the total value of publicly listed companies; however, it can also be characterized by its magnitude in relation to the generated volume of GDP generated in the given country. The importance of venture capital and private equity financing is reflected in the volume of capital raised by venture capital and private equity funds from institutional investors for investments, the amount of capital managed by the existing funds, the value of capital actually invested in each year and the number of companies financed by them in a year. Finally, the importance of venture capital and private equity investments can also be seen in the role the financed companies play in the economy, and also in the magnitude of changes they trigger in these companies. The study examines these relationships and effects in details.
Since its formation 20 years ago, the HVCA has become the undisputed voice of the Private Equity and Venture Capital industry in Hungary. The association has come a long way since its inception by five founding members in 1991 and today represents the interests of 74 firms in aiding public understanding of its members activities, promoting the industry to entrepreneurs and investors as well as maintaining a regular dialogue with public policymaking bodies at national and international level.