Why private capital is key to Europe’s industrial transformation

^{Eric de Montgolfier, CEO, Invest Europe}

Eric de Montgolfier is CEO of Invest Europe. The association represents Europe’s private equity, venture capital, and unlisted infrastructure investors, fund managers, and advisors. It’s based in Brussels.

Prior to joining the association in 2019, Eric was CEO of Paris-based investment firm Gimv, and co-founder and co-managing partner of Edmond de Rothschild Capital Partners. Before that, he was a co-founding partner of Astorg Partners.  

Eric talks with Shaun Beaney, Editor of Preqin First Close, and Kerstin Weil, Research Editor, about communicating on private markets, enhancing reputations, and Europe’s ‘quiet power’.

Shaun Beaney: Invest Europe aims to promote a better understanding of private equity. Who are your audiences? 

We represent 650 fund managers, as well as their investors, and 66% of assets under management in Europe are deployed by Invest Europe members. This makes us an important voice in the conversation about our industry, in Europe, and beyond. 

Our members come from 57 countries, including 42 countries that represent Europe geographically, including the EU27, although in terms of advocacy, we focus on the EU institutions in Brussels. 

Our key audiences shape capital flows, policy, and perception, which means we target institutional investors, policy-makers, media, and opinion formers. Our mission is to secure private equity, VC, and infrastructure’s fundamental license to operate. We build a better understanding of our industry, manage – when appropriate – the industry’s reputation, and make the case for investing in private capital in Europe.

SB: What are your key messages? 

First, private equity, VC, and infrastructure managers can be positive economic and societal forces. They create value, support job creation and employment, and foster innovation and growth. We have the data to support this first point.

Second, ours is a long-term active-ownership model that helps businesses become stronger and more sustainable, thanks to expertise and capital.

And third, Europe is itself a compelling investment proposition. We're a stable continent, rules based, innovative, and in need of long-term capital to help finance our competitiveness, defense, infrastructure, innovation, and the twin transitions: green and digital.

SB: What role does private capital play in Europe’s economy? 

Private capital is central to Europe’s economy and international competitiveness. Private equity, VC, and infrastructure managers play a significant role in society and the economy across the continent. They channel long-term capital into portfolio companies that need investment, improving operations in the process, accelerating innovation, and driving the competitive space.

In 2024, our industry invested €126bn, versus €100bn in 2023 – a 26% increase. In 2023, more than 28,600 companies received investment, of which 21,536 were SMEs.

When it comes to industrial competitiveness, Europe urgently needs capital for infrastructure, defense, innovation, and the energy and digital transitions. That’s precisely where we as an industry come in, not as a substitute to policy but as a financing and execution partner that can transform ambition into reality.

SB: How does private equity impact employment and job creation? 

When we look at the data we’ve published in our Private Equity at Work report, private equity- and VC-backed companies employ 11 million people, which represents 6% of the total European workforce. They are spread across every region, every country, supporting every community. In 2024, the job creation rate at the companies we backed was, on average, six times the rate of job creation across Europe.

SB: You have a campaign called ‘Investing in Europe’s Quiet Power’. What is it? 

The idea of Quiet Power is to inform non-European institutional investors and attract them to the innovation and outperformance of Europe’s private equity and VC fund managers. We’ve identified a significant gap between perception and the reality. Europe is often underestimated, but it combines stability, innovation, and investable private businesses in a way that’s highly compelling for long-term investors.

Kerstin Weil: What needs to change to encourage more of the region’s investment institutions, such as pensions, to allocate to private markets? 

Invest Europe calls for long-term capital needed to finance Europe’s transformation, which includes removing barriers for pension funds and insurers to invest in private equity and VC. That means fixing prudential and regulatory frictions, making fund structures more workable across borders, and building a framework that treats private assets as a legitimate part of prudent, long-term portfolios. 

In 2025, Invest Europe pushed for changes to the Solvency II regime for insurers and the CRD/CRR framework for banks, and for the removal of barriers preventing occupational pension funds from investing in private equity, VC, and infrastructure.

KW: What are the opportunities for investors in infrastructure? 

Infrastructure is one of the clearest opportunity sets in Europe, because the need for finance is massive. You’ve heard the figure of €800mn per annum from the Draghi report on EU competitiveness to renew and expand infrastructure linked to the energy transition, digitalization, and broader competitiveness.

Invest Europe’s first dedicated infrastructure report, published in December, showed that between 2020 and H1 2025, European infrastructure funds raised €265bn and invested €167bn in equity during that period. Renewable energy was the largest sector in recent years, followed closely by telecommunications and transport. So, for investors, this is attractive, not only strategically but also financially.

KW: Why are SMEs so important for Europe and for private equity? 

SMEs are Europe’s economic backbone, and private equity and VC are deeply tied to their development. In 2023, three out of four companies backed by our industry were SMEs. That represents 21,536 SMEs in Europe, employing more than one million people.

For us, SMEs matter because that’s where a huge share of Europe’s unrealized potential sits. These are the companies that often have strong products, talent, and regional roots. But they need capital, they need professionalization, and they need strategic support to scale organically and seize the opportunities associated with AI. That's exactly the kind of transformation that private capital delivers.

SB: You mentioned innovation as a key part of Europe’s ‘quiet power’. What role do private markets play? 

A decisive one. VC and growth capital not only fund innovation, they help turn it into companies and returns for investors. Private capital is essential in backing entrepreneurs, start-ups, scale-ups, and innovative companies across sectors, including deep tech, AI, life sciences and biotech, climate tech, fintech, and energy. All those segments will bring the jobs of tomorrow and bring competitiveness back to Europe.  

The numbers are really strong. Since 2015, European VC has invested €162bn in more than 26,000 companies, while delivering 18.95% net IRR over 10 years. It's a serious engine of European innovation that we’re representing.

SB: What’s next on Invest Europe’s agenda?

We’re very focused on three things. The first one is continuing to shape a better regulatory environment, so that private capital can operate and attract more investment to Europe, including from European capital allocators. In 2025, Invest Europe followed more than 40 policy topics, held more than 35 meetings with key officials at the European Commission, the European Parliament, and the European Council, and produced 40-plus consultation responses. Believe me, that work is not slowing down at all!

Second, we would like to double down on the sectors and themes that matter most for Europe’s future – infrastructure, VC, mid-market private equity, sustainability, innovation, and competitiveness. We’re expanding our private capital representation, most recently with the creation of an independent sponsors roundtable. 

Lastly, we’ll be continuing to speak directly to global investors and decision-makers. The goal is to make sure Europe’s ecosystem is better understood, the return on investment made clear, and our member firms are, if possible, selected by investors.

Shaun Beaney is Editor of Preqin First Close and Kerstin Weil is Research Editor. It’s quick, easy, and free to subscribe here.

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Special thanks to Eric Drosin and Guillaume Périgois at Invest Europe. 
 
_{The views expressed are the opinions of Invest Europe as of April 2026. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. Invest Europe is not affiliated with Preqin.}