In 2017, the Mittelständische Beteiligungsgesellschaften (MBG'en) invested € 151 million in medium-sized companies. "In addition to these investments made from its own balance sheet, MBG'en pledged a further €31 million through programs that it manages as a business manager," emphasizes Peter Pauli, Managing Director of BayBG Bayerische Beteiligungsgesellschaft and member of the BVK Board. The 15 medium-sized investment companies organised in the German Private Equity and Venture Capital Association (BVK) have thus underlined their role as important equity partners for small and medium-sized enterprises (SMEs).
The medium-sized investment companies are among the most active investment companies in Germany. With the € 151 million provided by the company itself, 487 investments were acquired (2016: € 185 million, 578 investments). They also support companies with various regional investment funds and the micromezzanine programme of the Federal Ministry of Economics, from which start-ups and small companies receive up to €50,000. From this alone, a further 320 micro enterprises were financed with € 11 million last year. This meant that a total of more than 800 participations could be implemented either directly or via the various programmes.
Partner of medium-sized businesses
Medium-sized investment companies have been investing in small and medium-sized companies for more than 40 years, generally with silent partnerships (mezzanine capital close to equity) or minority participations. The main focus is on growth projects and company successions, but also start-ups and start-ups. Since their inception, the companies have together financed around 15,000 companies with more than €4.3 billion. MBG'en currently holds just under € 1 billion in more than 2,900 companies. As self-help institutions of the regional economy, they invest in their own federal state and, as capital providers closely linked to their region, are competitively neutral. "The medium-sized companies financed by the MBG investments employ 150,000 people and have a turnover of more than € 28 billion", Pauli underlines the importance of MBG'en for medium-sized companies.
Securing the equity base
SMEs continue to have a high financing requirement which cannot be covered by credit financing or own funds alone. The implementation of growth plans and investment projects, such as digitisation projects, will also largely depend on the availability of (economic) equity. "Despite favorable credit financings a sufficient own capital funds are necessary, because it extends financing latitudes and prepares the enterprises against changes in the financing surrounding field, gives Ulrike Hinrichs, acting member of the executive committee of the BVK to consider. The MBG's and the guarantee banks associated with them in most German states offer companies a comprehensive range of financing. "MBG'en's capital offer is aimed at a broad spectrum of small and medium-sized companies, but also at start-ups," adds Pauli.
Further information on the MBG's and their financing offers can be found at www.mbg-beteiligungskapital.de. The MBG's are members of the German Association of Private Equity Companies and the Association of German Guarantee Banks (VDB).
The activities of the medium-sized investment companies are recorded by means of a separate survey outside the regular BVK statistics. The statistics for the entire German investment capital market were published at the end of February and can be downloaded from www.bvkap.de