Adley Bowden, Andy White November 18, 2015
Since the depths of the financial crisis in 2008-09, the U.S. economy has made a very strong recovery. This fact is particularly evident in the soaring—some would argue inflated—price of equities. Recovery has been notably more muted in Europe as a result, and with some additional help from central banks, the dollar continues to gain value against the euro.
This got us thinking: Is the strengthening dollar and the increase in price of domestic equities causing U.S.-based investors to look abroad, where they can get more bang for their buck? We turned to our M&A, PE and VC deal data to for the answer. The data says, yes.
As we can see above, the number of deals that U.S.-based investors and acquiring companies are completing in Europe has been steadily, and quickly, increasing. VC deal activity has shown particular growth, with nearly 3x more deals completed in 2014 than in 2010.
Capital invested also shows a similar trend. Private equity and M&A deals have drawn huge sums of capital from the United States, highlighted in 2015 by such deals as Medtronic's (NYSE: MDT) acquisition of Dublin-based Covidien for €43 billion in January.
Are U.S. investors adjusting strategy in the face of the U.S. economy's relative strength? It seems so.
PitchBook users, here is the link to the PitchBook Platform search if you want to dive deeper: PitchBook U.S./Europe deal activity.