Private-equity-funded Funecap Idf SAS has spent around €1 billion ($1.1 billion) to buy more than 300 crematoriums and funeral centers mainly in Europe, home to 17 of the top 20 countries with the highest death rates.

The French firm, backed by British financial investor Charterhouse Capital Partners LLP and France’s Latour Capital, is cashing in on the high cemetery costs, mobility needs and religious secularization that have raised the need for incinerations and alternatives to traditional church-driven services.

One in five Europeans is currently 65 years or older. By 2050, it will be closer to 30%. And unlike North America — which is facing a similar population decline threat — Europe has limited space to bury them when they eventually pass away.

“The funeral industry is way more than digging holes,” said Thierry Gisserot, Funecap’s founder and chief executive officer. “It’s an infrastructure play.”

Europe’s cremation market, in particular, benefits from high organic growth of 5% and 7% per year on average, he said. Incinerations have boomed in popularity, particularly in countries with Catholic roots where rules have eased in recent decades.

Funecap acquired Netherlands’ Facultatieve Technologies Ltd, the world leader of cremation equipment, in 2022 and recently became a partner in Rhein-Taunus-Krematorium GmbH, the largest one in Germany. RTK’s CEO Judith Könsgen said other investors had also come knocking.

The market for morticians and crematoriums is more fragmented in Europe than in other developed nations, particularly in Germany, according to Björn Wolff, founder of Mymoria GmbH. His company, which provides funeral services, has been buying up morticians in recent years, too, and wants to continue doing so.

“Family owners are retiring and their children no longer want to run the business,” Wolff said. By taking over, Mymoria is able combine certain areas like administration and improve cost efficiency.

Meanwhile, cash flow in the sector is predictable — people have to die. Deaths are expected to gain speed in the coming years as the baby boomer generation ages, which will likely drive up revenues for companies like Funecap and Mymoria.

Another source of income that is considered more controversial is the sale of metal scraps left over after human bodies have been cremated.

Many people have gold teeth, artificial hips or knee joints, which contain titanium, cobalt or chromium. In most European countries, the metals are removed from the ashes and sold to metal recyclers. That’s not illegal as long as relatives are informed.

Many crematoriums say they donate all or part of the proceeds. According to Jan-Willem Gabriels, head of metals recycler OrthoMetals A/S, the donation process varies strongly between European countries: Germany lacks national regulations on the matter, while Sweden requires crematoriums to send proceeds to its state inheritance fund.

“Sometimes it’s 100%, sometimes 50%,” Gisserot said of Funecap’s policy on donations. “Since a corporate is not a charity, you need to use the proceeds in the best interest of the corporate.”

At the same time, RTK’s Könsgen said “some investors seem to assume that crematoriums are a money-printing machine,” but that the idea is delusional. 

“You have to invest a lot in the equipment and processes and take care of the maintenance, but if you know what you’re doing, you can achieve an adequate return,” she said.