Europe is gaining momentum this year across private capital as firms shift focus to the continent (and away from the US). Firmer macro data, lower entry multiples, and domestic policy volatility are pushing investors to reevaluate geographic priorities.
The big theme at last week’s SuperReturn Berlin conference: sponsors across the board are agreeing on potential European upside and are preparing to put dollars to work.
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At the event, Blackstone Chief Executive Steve Schwarzman told Bloomberg TV the firm plans to invest “as much as $500 billion in Europe over the next 10 years” because “we see it as a major opportunity for us.”
He added, “They are starting to change their approach here, which we think will result in higher growth rates.”
Apollo Global Management President Jim Zelter delivered a similar message in Berlin. “Whether it’s a pull domestically or a push from the current administration, there is a revitalized enthusiasm about investing in Europe,” he said on Bloomberg TV.
KKR had already shared the sentiment last month.
“What we’re saying to people is think about other places in the world where we can actually put money to work,” said Kravis when asked about the firm’s response to tariffs at May’s Milken Institute Global Conference.
Kravis singled out Chancellor Friedrich Merz’s trillion-euro defense and infrastructure plan as “real opportunity,” noting he is “getting a different vibe back from Europeans today than what I had seen in the past. They’re waking up now.”
Alongside policy-related factors, valuations are also part of the draw.
Nikos Stathopoulos, chairman of Europe at BC Partners, told conference attendees that “this disconnect between valuations, between European and US companies, was not really justified. People are seeing it now.”
Bain & Company data show that the trend is already underway. European buyout deal value jumped 54 percent in 2024 versus the prior year, well ahead of North America’s 34 percent. A separate McKinsey report shows an even bigger 65 percent year-over-year jump in European take-privates.
Broader economic data is also showing real strength. Eurostat’s latest revision showed first-quarter euro-area GDP up 0.6 percent, double the previous estimate. Ireland alone delivered almost 10 percent quarterly growth.
Macro-political risk in Washington is boosting Europe’s risk-adjusted appeal.
Oaktree’s Howard Marks told the Financial Times, “The US has been the best place in the world to invest for a century, but I’m starting to hear investors question whether US exceptionalism is a little less exceptional, and think about whether to position their portfolios accordingly.”
European policymakers are taking advantage of the opportunity.
Berlin’s economy ministry has courted Apollo, while London fast-tracked planning for Blackstone’s hyperscale data center campus in northern England, reducing execution risk for sponsors that once viewed the region as administratively slow.
Regarding investor confidence, the US political environment appears to be heading in the opposite direction.
Neuberger Berman’s Joana Rocha Scaff told the FT, “It’s more than tariffs… It’s not just the trade wars but some of the domestic instability [in the US] and proposed tax bills that impact non-US investors.”
BlackRock’s Larry Fink was more blunt in his response last week to the Trump administration’s tax bill: “We have a pending tax bill that’s going to add $2.3-$2.4 trillion on the back of [the existing $36 trillion in US debt]. If we don’t find a way to grow at 3 percent a year … we’re going to hit the wall.”