Germany

Private equity and venture capital research, reports and surveys with a focus on Germany

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• The German VC Market 06 Sep 2006. Source: Neuhaus Partners. Dr. Pablo Fetter. The VC market in Germany displays a number of attractive characteristics, says Dr. Pablo Fetter of Neuhaus Partners in this white paper. The encouraging state of the market is attributed to one main factor: the present status and the dynamics of venture capital supply and demand are very favourable.

• German private equity industry update 05 Jul 2006. Source: BVK (Bundesverband Deutscher Kapitalbeteiligungsgesellschaften). New investments did not break a record last year, but fundraising in Germany has started anew, while portfolio sales have developed in a positive way, says the BVK.

• BVK half-year statistics 2005 09 Jan 2006. Source: BVK. The German private equity market temporarily loses strength, says the BVK, while fund raising and early stage investment increases - and total losses continue to decline.

• A calm private equity market in Germany 21 Nov 2005. Source: BVK. Investments in the German private equity market in the first quarter 2005 totalled €418.7m but did not reach the results of the first quarter 2004, says these statistics presented by the German Private Equity and Venture Capital Association.

• Germany: minimising exposure thanks to the flexibility of the GmbH 09 Nov 2005. Source: SJ Berwin. Sebastian Gronstedt. In order to monitor their investment in a German portfolio company, private equity investors usually appoint an investment manager to the 'board' of the company, says SJ Berwin. As portfolio companies are often structured as a limited liability company (GmbH), investors take advantage of the flexibility that the GmbH offers to reduce appointees' exposure.

• German tax 10 Aug 2005. Source: SJ Berwin. Structuring a pan-European private equity fund is already hard enough, so the tax shenanigans in Germany in recent years have been an unwelcome headache for funds with German teams, or German investors, says SJ Berwin.

• Germany: KPMG Leveraged Finance Study 2004 16 May 2005. Source: KPMG. Dr Martina Ecker, Moritz Freiherr Schenck zu Schweinsberg and Dr Carsten Heckemüller. In this study, KPMG analyses the German leveraged finance market and relationships between equity and debt providers. Their conclusion? These are interesting times for private equity houses in Germany.

• German carried interest rules: the new regime 18 Nov 2004. Source: SJ Berwin. André Gloede and Michael Hils. On 6 August 2004, new rules on the taxation of carried interest came into force in Germany. The new law is intended to improve the environment for private equity, says SJ Berwin. That is critical: according to an EVCA study published in May, Germany has the fourth worst legal and tax environment for venture capital and private equity in Europe, beating only Austria, Denmark and Slovakia.

• Economic Impact of Private Equity in Germany: How buy-out investments influence the German economy – an empirical analysis. 12 Nov 2004. Source: Deutsche Beteiligungs AG (DBAG). In a buy-out, a company’s managers give up their salaried positions and become entrepreneurs. The change means more risk and increased motivation for the management team, says Deutsche Beteiligungs AG. With the help of a financial sponsor who can improve the operation’s financial situation and contribute know-how in the areas of structured financing and internal organizational improvements, the team can create momentum that will fuel increased growth. That is the theory, anyway. But how do private-equity companies perform in the long run?

• Bad reputation, good opportunity: An inside perspective on venture capital in Germany 27 Sep 2004. Source: Wellington Partners. Joerg Ueberla. Historically, those who have doubted the attractiveness of German venture capital opportunities have pointed to a lack of leading edge technologies, the inexperience of the country's entrepreneurs, a lack of worthy track record among venture capital firms and a scarcity of exits. Joerg Ueberla of Wellington Partners argues that while this may have been true in the past, it is in no way relevant to the current German venture capital landscape.

• Taxation of carried interest in Germany 05 Aug 2004. Source: Debevosie & Plimpton. Friedrich Hey and David Hickok. With the German legislature poised to resolve the controversy surrounding the taxation of carried interests, the tax outlook for German private equity professionals is looking good, according to Friedrich Hey and David Hickok of Debevoise & Plimpton.

• Tax Reporting for Private Funds Sold in Germany: Moving in the Right Direction 01 Jul 2004. Source: Debevoise & Plimpton. Marcia L MacHarg and Patricia Bauernfeind Volhard. After much pressure from powerful industry groups, the German ministry of finance has now indicated that private equity funds should not fall within the definition of ‘investment funds’ as referred to in the German Investment Act. If confirmed by an official pronouncement, this means that private equity funds will now not be required to publicly report a detailed list of assets, according to Marcia MacHarg and Patricia Bauernfeind Volhard of Debevoise & Plimpton.

• Buy-outs of small and medium-sized German enterprises emerge from the doldrums 14 May 2004. Source: Global Vision. Dr. Dieter Brender. Just E1.5bn of private equity is currently invested in the German mid-market, compared to E6bn in the UK. For private equity firms with a genuine experience of this market, this means that there are real opportunities to realise interesting investments with expected returns well above the European average, according to Global Vision.

• Developments in German taxation applicable to private equity sponsors and investors 08 Mar 2004. Source: Weil Gotshal & Manges. Douglas Warner and Ernest Ceberio. Until recently it has been more beneficial for German investors to invest in a parallel German fund than in a fund entity established outside of Germany. But, in 2003 a number of developments occurred which may reduce this tax advantage, according to Weil, Gotshal & Manges.

• The giant engine who could? 10 Feb 2004. Source: Electra Partners Europe. Brian Veitch. The German private equity industry has struggled to live up to its much touted promise over recent years, but Brian Veitch of Electra Partners Europe believes that the market could finally be turning a corner. Here, Veitch examines the stumbling blocks that have held Germany back in the past and looks ahead to better times for those private equity firms prepared to roll up their sleeves and to really get involved in turning their portfolio companies around.

• German private equity activity in 2002 / 2003 03 Feb 2004. Source: Ernst & Young. The total volume and value of German private equity deals increased in 2003. But exit opportunities remain restricted, according to Ernst & Young.

• Q4 2003: Private equity survey - Austria, Germany and Switzerland 28 Jan 2004. Source: Deloitte & Touche. The German-speaking private equity market is displaying positive signals for 2004, according to the Q4 2003 Private Equity Survey conducted by Deloitte & Touche. But the overall confidence indicated by the majority of private equity managers has not extended to more optimistic fundraising expectations.

• Will Germany ever live up to its private equity promise? 30 Sep 2003. Source: Advent International. Ralf Huep. The German middle-market still bears enormous potential if private equity firms are able to ‘wake up' the companies that they invest in, according to Ralf Huep of Advent International.

• German Tax 30 Jul 2003. Source: SJ Berwin. For private equity houses operating or investing in the German market, the uncertain tax environment has long been cause for concern. But a statement of practice on fund taxation expected to be released later this summer may finally be cause for some cautious optimism, according to SJ Berwin.

• Germany as a technology powerhouse 09 Jul 2003. Source: Wellington Partners. Germany's economy is characterised by technological leadership and a tradition of entrepreneurship, according to Wellington Partners. But investment in Germany's technology sector is hampered by an international perception of the country's sluggish economic growth and political gridlock.

• M&A Review for Germany, Switzerland and Austria 26 Mar 2003. Source: Dealogic. Germany, Switzerland and Austria's mergers and acquisitions markets have been unable to avoid the downturn felt by the rest of the world. Dealogic provides a detailed analysis of the M&A market in the region for the twelve months to January 2003.

• German market for management buy-outs: a personal view 04 Mar 2003. Source: Andrew Richards. The German market has long been touted as being ripe for private equity investment, particularly in the famed ‘Mittelstand', a breeding ground for buy-outs. But, argues Andrew Richards, previously managing director of 3i Germany, the country is unlikely to live up to expectations. Here he presents a personal view of the prospects for the German market going forward.

• Tax planning for mergers and acquisitions in Germany 28 Jan 2003. Source: Freshfields Bruckhaus Deringer. Since the introduction of sweeping tax reforms in Germany in 2000, the most important changes being the taxation of corporations, their dividends and capital gains in corporation shares, it's important for investors to watch out for pitfalls, says Freshfields Bruckhaus Deringer.