German private equity market with a strong first half year 2019

Published On: October 31st, 2019

Berlin, 31.10.2019

“In the first half of 2019, private equity firms in Germany invested a total of €6.6 billion. Following two years of strong investments, we expect 2019 to be another very successful year for the German private equity market,” said Ulrike Hinrichs, Executive member of the board of the German Private Equity and Venture Capital Association (BVK), commenting on the preliminary market figures presented today.
“All market segments, from venture capital and minority investments to buyouts, contributed significantly to this impressive investment result. We even expect a record year for venture capital.“ In total, more than 550 companies received private equity in the first six months of the year, of which a 320 received venture capital.

Venture capital on record course

At €852 million to date, venture capital firms have invested more venture capital in the current year than ever before in a half year in the recent past. By way of comparison, €797 million and €670 million respectively were invested in the two halves of 2018. “We are thus on the way to reach a new record. Since the summer, further major rounds have been reported, which give us optimism for the second half of the year,” said Hinrichs.
In 2017 and 2018, a total of €1.29 billion and €1.47 billion in venture capital were invested by venture capital firms in Germany. “The German venture capital market has developed a pleasing dynamic, with the largest volumes still coming from abroad,” adds Ulrike Hinrichs.

Buyouts also above previous year’s level

Buyout investments in the first six months of the year totalled € 4.67 billion, exceeding the level of the two half-years 2018 (H1: € 4.09 billion, H2: € 4.34 billion). “We are observing continued buoyant buyout business,” said Hinrichs. “Of course, the public focus is on the major transactions, some of which we have seen so far this year.
Among others, Ifco Systems and Evonik’s methacrylates business were acquired by private equity at the beginning of the year. The second half of the year brought further notable transactions with the acquisitions of Robert Bosch Packaging, Adco and Axel Springer, which in turn will have a positive impact on the investment volume for the year as a whole. “But there is also a lot of movement in the market for small and medium-sized transactions. Many family businesses are currently in the focus here,” adds Ulrike Hinrichs. A total of 76 buyouts were counted in the first six months.

There was also an increase of minority investment (growth, replacement and turnaround financing), which are mostly target medium-sized companies. These totalled € 1.09 billion and thus exceeded both half-years in 2018 (H1: € 0.97 billion, H2: € 0.59 billion). In addition to a large number of growth financings for small and medium-sized enterprises, a number of large individual investments in established SMEs and more mature young companies in particular contributed to the increase in investment.

The complete, preliminary statistics for the first half of 2019 can be found here.