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Private equity groups have ramped up activity in Europe over the past year, taking advantage of the continent’s economic woes to acquire large companies with depressed valuations.

The total value of buyout deals in Europe worth more than $1bn increased at more than twice the rate of the rest of the world, a Financial Times analysis of Dealogic data showed.

Some $133bn of major deals were struck on the continent in 2024, a 78 per cent increase on the previous year. That compares to a 29 percent increase in the rest of the world, at $242bn.

The data is the latest evidence that private equity firms are feasting on Europe’s wealth cheap companies.

Major transactions include a $6.9 billion consortium agreement for investment platform Hargreaves Lansdown and a $5.5 billion deal by Thoma Bravo to acquire private cyber security company Darktrace in the UK, and companies including Brookfield which agreed to take a $3.8bn stake in French renewable energy developer Neoen.

A challenging economic outlook – with weak growth forecasts, political unrest and geopolitical threats – and the strength of the US dollar encouraged US private equity funds to target specific countries within Europe, according to Neil Barlow, a partner at the law firm Clifford Chance.

“Some stronger economies within Europe, such as the UK, the Nordics and Germany (become) a center for private capital providers”, he said.

European stock exchanges, including the London Stock Exchange, are fighting an exodus of companies, as businesses transfer their listings to the US or go private with the support of buyout companies.

The value of European so-called take-private deals involving a majority stake of more than $1bn jumped 44 per cent to $52bn last year, Dealogic data showed, with 15 such deals compared to 10 in last year.

European equities have been trading at lower valuations than those listed in the US for the past decade. But the gap is widening, and the Stoxx Europe 600 is now trading at a record discount to the S&P 500 in the US.

However, take-privates will account for a smaller share of the total value of large buyout deals in 2024 than last year.

There have been several large transactions where ownership has moved between different private equity firms, or where the composition of a consortium of private equity owners has shifted.

In December, the investment arm of Goldman Sachs Asset Management has agreed a more than €2bn deal to acquire Dutch drugmaker Synthon from UK buyout firm BC Partners.

As early as 2024, Swedish buyout group EQT has agreed to be sold a stake in school business Nord Anglia to a consortium of investors valuing the business at $14.5bn, while EQT retained control.

Smaller deals have grown faster in the rest of the world than in Europe, however. Buyouts where the majority stake is worth between $50mn and $1bn grew just 1 per cent in Europe last year, against 16 per cent in the rest of the world.

Richard Hope of private markets firm Hamilton Lane said it was “unsurprising” that the continent recorded slower growth than the rest of the world for small deals.

“The volume of the European market is sub-€1bn space”, he said, adding that the lower end of the market suffers from “the macro headwinds that are in the region”.

Alexis Maskell of private equity firm BC Partners said the buyout market in Europe is “both fragmented and very diverse but . . . you can source market-leading, but relatively under-the-radar, companies larger than $1bn”, often “at a discount to their US peers”.

Additional reporting by George Steer