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A heady mix of economic and geopolitical headwinds made for a tumultuous 2022.

To see how private markets fared through this new environment, the PitchBook 2022 Annual European PE Breakdown offers up some key themes.
   
Deal volume and value are estimated to have slightly increased in 2022 over 2021, itself a blockbuster year in part because of pent-up demand as pandemic restrictions were loosened. According to the figures, deal count for 2022 was up 13.1%, and deal value increased by 1.4% on the previous year.
   
The amount of AUM in European PE ended the year at an all-time high, standing at €873.9 billion (about $943 billion). This came despite interest rates rising across the region, with the European Central Bank increasing to 2.5% while the Bank of England lifted its base rate to 3.5% in the space of last year. These changing economic conditions would have an impact across private markets as a whole in the region.
   
Even with record amounts of dry powder, European fundraising has slowed. Last year was the slowest fundraising year since 2014, with €52.8 billion raised across 92 funds. On a year-over-year basis, fundraising more than halved as capital became more expensive thanks to higher interest rates.
   
Exits were at their lowest level in nine years, with total confirmed exit value totaling €199.35 billion. That's down from a record high of €387.93 billion in 2021. This in turn impacted distributions back to LPs at a time when investors are reviewing their allocations—which has a knock-on effect on fundraising. LPs have been less inclined to invest in new managers, with just 15.2% of funds closed last year led by first-timers. This was the lowest number since 2006.  
   
One aspect of last year is that there were more small deals, as opposed to the mega-deals that dominated in 2021. There were only 36 deals in excess of €1 billion completed last year, around half the number of the previous year. The largest deal to be struck in 2022 was Blackstone's €21 billion recapitalization of logistics company Mileway.
   
Finally, last year saw the highest proportion of add-ons for overall buyout deals to date at 67%. This is partly driven by PE firms seeking to take advantage of falling valuations to bolster their existing portfolio companies with smaller acquisitions. One example of this type of deal was UK grocery giant Morrisons' purchase of convenience store operator McColl's Retail Group for €216.7 million in May 2022. Morrisons is owned by Clayton Dubilier & Rice.