The pandemic has made technology the new safe haven for investment. Growth Equity is booming and within it secondary transactions may become more prevalent.

Photo by Cipio Partners

The pandemic has made technology the new safe haven for investment

The global economy is in what could well become the deepest recession of our lifetime. The lock downs around the world in the first half of the year have slowed the economy in most countries by typically 10–20% and for the full year we are anticipating several percentage points GDP decline for the global economy. This recession is significantly more severe than the Global Financial Crisis or anything else that we have seen in our lifetime.

Growth Private Equity becomes serious business in Europe

In this context, Growth PE is becoming an increasingly attractive asset class. Growth PE exists at the intersection of venture capital and traditional private equity.

Secondary Growth Equity may particularly benefit from the impact of the pandemic

If technology is seen as a relatively safe investment in an uncertain world and Growth PE is a growing, successful segment in private equity one is tempted to think that all active players in the market will benefit.

Conclusion

As challenging as the world may seem for all of us, as exciting are the investment opportunities in European technology. The sector is helping to transform the continent and the world, making it more resilient in the pandemic. Europe starts to see an increasing number of technology companies that achieve real scale. A growing number of Growth PE investors are raising more sizeable funds to back the growth of these companies and provide liquidity to existing shareholders.

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Cipio Partners

Cipio Partners

European Growth Capital and Minority Buyouts for Technology Companies. Read more at: www.cipiopartners.com