German private equity firmly on course to defy its sceptics


The German private equity industry is going through a transitional stage that will consign to memory the frustrations of its early evolution and produce a more sustainable and attractive investment market, according to a report just published by AltAssets.

The drivers for a strong resumption in growth are firmly in place and will be more than adequate to overcome the mounting scepticism engendered in many institutional investors by the difficulties they have experienced in recent years, the report says. The result will be a distinct German model rather than Anglo-Saxon model of private equity.

The German private equity market has been an anticlimax for years. Investors have been sitting there waiting for the Mittelstand to produce deals like apples falling off trees but it turned out to be much slower and much harder work.

‘The supply of deal flow is just one of a series of misconceptions about the German market. The reality is something more subtle and complex but something that will, eventually, be much more supportive of a healthy private equity industry. The short-term will be tough but the outlook is bright,’ said Richard Sachar, managing director of Almeida Capital.

The report, sponsored by Bank of Scotland, looks in detail at the size and composition of the German market in the context of the country’s recent economic and political history. It describes legislative developments and looks at the rapid evolution of the industry since the mid 1990s. It also surveys the opinions of a wide selection of institutional investors, both domestic and foreign, and analyses their experiences of the market.

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