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Assessing the economic impact of EIF-supported equity financing: The case of Lower-Mid Market

Author

Listed:
  • Bertoni, Fabio
  • Colombo, Massimo G.
  • Montanaro, Benedetta
  • Quas, Anita
  • Tenca, Francesca

Abstract

This working paper assesses the economic impact of EIF-supported equity investments in the Lower Mid-Market (LMM) segment across Europe between 2007 and 2023. Using advanced causal inference techniques, the study compares over 1,700 investee firms with a matched control group to isolate the effects of private equity financing backed by the EIF. The findings show that EIF-supported LMM investments significantly boost company growth - especially in total assets, intangible assets (a key proxy for innovation), and employment costs. A short-term drop in productivity (measured by turnover per employee cost) suggests that firms may initially prioritize scaling up and improving human capital over immediate efficiency gains. The study reveals how different deal types (majority vs. minority stakes), company sizes, sectors, and locations influence growth outcomes. This report is part of the EIF's broader Impact Assessment Framework which serves as an important pillar for the strategic development of the institution.

Suggested Citation

  • Bertoni, Fabio & Colombo, Massimo G. & Montanaro, Benedetta & Quas, Anita & Tenca, Francesca, 2025. "Assessing the economic impact of EIF-supported equity financing: The case of Lower-Mid Market," EIF Working Paper Series 2025/105, European Investment Fund (EIF).
    • Handle: RePEc:zbw:eifwps:328254
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    References listed on IDEAS

    as
    1. Steven N. Kaplan & Per Stromberg, 2009. "Leveraged Buyouts and Private Equity," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 121-146, Winter.
    2. Hammer, Benjamin & Marcotty-Dehm, Nikolaus & Schweizer, Denis & Schwetzler, Bernhard, 2022. "Pricing and value creation in private equity-backed buy-and-build strategies," Journal of Corporate Finance, Elsevier, vol. 77(C).
    3. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2012. "Causal Inference without Balance Checking: Coarsened Exact Matching," Political Analysis, Cambridge University Press, vol. 20(1), pages 1-24, January.
    4. Sharjil M. Haque & Anya V. Kleymenova, 2023. "Private Equity and Debt Contract Enforcement: Evidence from Covenant Violations," Finance and Economics Discussion Series 2023-018, Board of Governors of the Federal Reserve System (U.S.).
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