Amid volatile global markets and falling business confidence, Cinven sees investment opportunities across Europe that will create value and drive growth, explains Jorge Quemada, Cinven’s co-Managing Partner and Chair of its Investment Committee.

With ongoing market instability, investors face unsettling times. There is a real possibility that the US dollar may lose ground as the world’s reserve currency, that stock markets worldwide remain lower for some time, adversely affecting valuations and the ability to raise debt, that inflation creeps higher and consumers rein in spending.

Nevertheless, we think Europe has some unique characteristics that make it extremely attractive as an investment market, even in – maybe especially in – today’s turbulent environment.


1. Size matters

Europe is the second-largest economic region in the world. That makes trade within the region simpler and less susceptible to external shocks such as tariff hikes. GDP growth in Europe is also expected to be less affected than in other regions, inflation seems to be in a better place and interest rates are going down. So, while we track macro events closely, we are micro investors and the structural micro trends we target with our investments are relatively insulated in Europe.

2. Valuation gap and generating Alpha

The valuation gap with the US remains high – even with falling markets – making it possible to close attractive deals in Europe due to lower expectations and valuations for new potential investments. Diversified investors, like Cinven, who invest behind a breadth of sectors can target particularly interesting segments and originate well to generate even more attractive valuations through off-market deals.

And, while it’s true that Europe is seeing lower growth than some other regions, it is also trending towards a low interest rate, low inflation environment that lends itself to Alpha investors like Cinven.

3. Dislocation creates opportunity

Volatility can trigger opportunities – companies divesting a division to focus on core activities, for example. Europe remains a land of primary deals – carve-outs and founder-led divestments – which have been a sweet spot for our last three funds. These include the spin-out of TKE from ThyssenKrupp; the creation of digital services provider group.one through the merger of one.com with dogado; and Idealista, in which Cinven acquired a majority stake together with founder Jesús Encinar in June 2024.

4. You can win if you’re local

While Europe is a trading bloc, it’s also a patchwork of complexity – different countries, languages, cultural norms, currencies, tax codes, regulatory regimes – which can make it hard to navigate. However, firms like Cinven with deep local presence, knowledge and networks, can leverage local nous to access the most attractive investment opportunities. Trust-based relationships are key to unlocking primary transactions. Some of Cinven’s deals have been more than twenty years in the making and are only possible because we’ve been on the ground in each of Cinven’s markets for many years.

5. Playing catch-up

There are areas in which Europe has fallen behind, for example, digital technologies, infrastructure and defence. Macro-economic trends and geopolitical instability are persuading  European governments of the importance of investing in home-grown sector leaders, opening up opportunities for private equity investment to help strengthen these sectors within Europe. We are seeing Germany, in particular, using its fiscal strength. After a long period of very low debt/GDP ratio, this is now being unleashed, which will drive growth.

6. Incoming funds

International investors have been disturbed by the unpredictability of US policy, which may see them choosing to allocate more capital into European funds. So, while at Cinven we have long appreciated the structural advantages of the European investing environment, it is possible that current market volatility will open others’ eyes to Europe as an attractive investment region.

This analysis stems from experience. We’ve been investing in Europe for nearly 50 years through cycles, and our experience has helped us build the skills and capabilities to successfully allocate capital on behalf of our investors.  

While it’s impossible to predict the macro environment, we are confident that the micro trends we have identified coupled with Europe’s structural attributes offer cause for optimism. Europe remains full of opportunity.