The number of carveouts in Europe hit a seven-year high last year, according to PitchBook data, and they should continue to rise for the foreseeable future. Carveouts are uniquely situated to benefit both from economic insecurity and confidence, and so in Europe, it makes sense that carveouts are more popular, as businesses are bouncing back, while high unemployment levels are still leaving consumers languid.
It’s easy to chalk up the increased activity to stronger investor confidence and corporations’ willingness to divest operations to focus on core businesses. Yet that assertion is overly simplistic; according to the European Commission, capital flows still trouble financial markets and high levels of unemployment still threaten consumer demand. So, what's really behind the continued popularity of carveouts in Europe?