ABSTRACT
The European private equity and venture capital industries as a whole are becoming larger, healthier, and more diverse, but it must be remembered that its greatest successes frequently have little to do with SMEs. For example, a great percentage of the private equity and VC money is going to buy-outs, and most of the buy-out money heads towards the largest firms. Meanwhile, the largest firms are receiving the highest valuations by far as measured by P/E ratios in these deals. Even in the current boom, while P/E ratios for buy-outs of the largest firms are rising quickly and are the highest by far, P/E ratios for smaller firms are actually declining.
