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Germany's private equity investment in H1 2002 down 29 per cent on last year

German private equity investment in the first half of 2002 fell by 29 per cent to E1.2bn, compared to E1.7bn in the same period last year, according to figures released by the German Private Equity Association BVK. The figures will disappoint those expecting an acceleration in German private equity activity following tax reforms that came into effect on 1 January 2002.

Werner Schauerte, chief executive at BVK, said he now expected 2002 to be the worst year for the industry since 1999. ‘Even if there is an emphasis on investment activity in the second yearly half, it will be almost impossible to reach the previous year's result,' he said.

But there was some modestly good news for German investment. Some E727.2m was invested in the second quarter of 2002, a considerable increase on E482.2m invested in the first quarter.

The majority of investment activity was in buy-outs. Expansion investment represented 24.6 per cent of the investment volume, while early stage financings sank to 18.2 per cent of total investment from 34.8 per cent last year.

An AltAssets survey of more than 100 of Europe's most active institutional investors in private equity published earlier this year found that Germany was expected to be the continent's most interesting market over the next five years. But today's statistics suggest that investors will have a long wait before the interesting times begin.

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