At the beginning of this year the German private equity market presents itself in good shape. Compared to last year’s first quarter German private equity firms raised more funds invested in more companies, announced the German Private Equity and Venture Capital Association BVK e.V. at its press conference today.

“Private equity and venture capital firms invest more funds.”, said Prof. Dr. Michael Gross, Vice Chairman of the BVK Board.  “Investors are regaining confidence in the economic location Germany”.  The positive development of the German economy supported by governmental initiatives such as the High-Tech Gründerfonds and the ERP/EIF fund are making an essential contribution.”, Gross said.

In the first three months of the year 2006, BVK members raised new funds totalling 553.1 million Euro including six funds totalling 311.1 million Euro from external investors.  The main focus of the funds was the middle class (Mittelstand) (expansion and buy outs).

Investments in the first quarter 2006 totalled 510.8 million Euro thus exceeding all previous quarters except the very busy 4th quarter 2005 when 1,923.6 million Euro were invested in 419 companies.  “Usually, the 1st quarter of a year is the weakest with regard to investments”, said Dr. Holger Frommann, Managing Director of the BVK.  It behaves like an athlethe who has to warm up before a competition.  “Experience shows that investments will increase in the course of a year.  In the middle of this year we will see a much clearer tendency.”, Frommann continued.

Trend to smaller buy-outs
Many smaller buy-outs were characteristic for the first quarter 2006, in terms of numbers it were 26 buy-outs totalling 323.2 million Euro which are two thirds of all investments. “We see a trend to smaller buy-outs in the middle class (Mittelstand).”, said Frommann.

Venture capital investments (187.6 million Euro) made up one third of all investments.  Compared to the first quarter 2005 there is hardly no change (194.4 million Euro).  Within the venture capital sector the early stage achieved 71.4 million Euro and remained on a low but constant level.  Although the first quarter 2006 was weaker than the 4th quarter 2005, it clearly exceeded last year’s first quarter (54.6 million Euro).  Seed investments marked another highlight after the 4th quarter 2004 now totalling 5.3 million Euro.  “We see a slight increase in investments especially in the early stage, but to be internationally competitive we need a steep growth.”, said Gross.

Total losses on lowest value for 10 years
Some bigger sales let exits (496.9 million Euro) reach almost the level of the first quarter 2005 (566.6 million Euro).  “Share and M&A markets have recovered.  That’s why trade sales and sales of shares dominate the first quarter.”, Gross explained.  Trade sales accounted for 30.2 per cent of the exit amount, sales of shares for 35.5 per cent.  Total losses totalled 33.7 million Euro thus falling behind the low level of last year’s quarters and accounting for 6.8 per cent of the exit amount.

Note:

Private equity means investments to companies not quoted on the stock exchange in all stages i.e. venture capital and buy-outs.  Venture capital means early stage (including seed and start-up) and later stage (expansion) investments.

Contact:

Bundesverband Deutscher Kapitalbeteiligungsgesellschaften – German Private Equity and Venture Capital Association e.V. (BVK)
Reinhardtstrasse 27 C
10117 Berlin
Prof. Dr. Michael Gross, Vice Chairman of the BVK Board
Dr. Holger Frommann, Managing Director
Phone:  +49.(0)30.30 69 82-0
Fax:  +49.(0)30.30 69 82-20
E-mail:  bvk@bvk-ev.de
Web :  www.bvk-ev.de

VOCATO public relations
Birgit Brabeck
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Phone:  +49.(0)22 34.6 01 98-18
E-mail:  bbrabeck@vocato.com