BVK: Hopeful start into the year for the private equity market

"The German private equity sector has every reason to be optimistic" says Ulrike Hinrichs, Managing Director of BVK. The latest quarterly figures confirm this, released today by the German Private Equity and Venture Capital Association (BVK) for the German private equity market. In the first quarter of 2011 private equity investment in Germany companies reached €1,169 million, which does represent a slight decrease compared with the previous quarter which reached €1,362 million and compared with the result for the comparative quarter of the previous year (€1,375 million). Despite this a further stabilization of investments at a sustainable level must be noted for the German private equity market. Past experience shows that the first quarter of a year is in general the quarter with the least investments compared with the remaining quarters in a year; based on this assumption this gives hope for a successful private equity year 2011.

Total investments of €1,169 million were made in 336 companies. Of this amount € 922 million or 79 % were majority investments (buy-outs). Buy-out investment lay thus only slightly below the figures for the previous quarter (€ 952 million), but did significantly exceed the amount of the corresponding quarter in the previous year (€ 695 million). The number of recorded transactions remained with 21 almost unchanged to that of the previous quarter, which recorded 23.

Around 13 % of the total investment was made in venture capital engagements (seed, start-up, later stage venture capital) and the remaining 8 % were made in other minority investments (growth, turnaround and replacement financing). Following the comparatively investment-heavy last quarter of 2010 (€ 234 million), venture capital investments could not reach the same level again in the quarter just ended. However, with € 151 million the result of the first quarter of 2010 (€ 134 million) was surpassed. The number of companies financed through venture capital remained here almost unchanged (Q1 2010: 283, Q1 2011: 274).

Based on the stable investment figures at the start of the year and the continued positive macroeconomic environment, the BVK looks with optimism to the progression of this year. For this reason, in Germany in 2011 private equity will yet again be making a considerable contribution to the successful development companies, in particular of numerous small and medium-sized companies.

Detailed statistics on the German private equity market for the first quarter can be downloaded at www.bvkap.de.