August 6, 2012
The German Private Equity Barometer published by BVK/KfW posted a steep decline from 42.1 points in Q1 to 23.7 in Q2. The reasons for this decline include the downturn in the overall economic outlook, a fear of writedowns on portfolio companies and a deterioration of the exit channel. On the upside, respondents say that demand for private equity in Germany is still robust and that venture capitalists receive high-quality business plans.
Regular readers will be unsurprised by this turn of sentiment, of course. It is well in line with elevated and rising difficulties in European debt markets. In fact, debt market conditions and economic performance never fully backed the exuberant/strong PE sentiment of H1 2011 and Q1 2012. While current data points to a weaker Q3, actual deal flow during July so far already appears to be stronger than expected. One explanation may be that some deals were postponed from May/June, when debt markets tightened sharply, towards Q3. However, the outlook is unusually volatile and depends strongly on further developments of the euro debt crisis.
© Copyright 2013. Deutsche Bank AG, DB Research, D-60262 Frankfurt am Main, Germany. All rights reserved. When quoting please cite “Deutsche Bank Research”.
The above information does not constitute the provision of investment, legal or tax advice. Any views expressed reflect the current views of the author, which do not necessarily correspond to the opinions of Deutsche Bank AG or its affiliates. Opinions expressed may change without notice. Opinions expressed may differ from views set out in other documents, including research, published by Deutsche Bank. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.
In Germany this information is approved and/or communicated by Deutsche Bank AG Frankfurt, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht. In the United Kingdom this information is approved and/or communicated by Deutsche Bank AG London, a member of the London Stock Exchange regulated by the Financial Services Authority for the conduct of investment business in the UK. This information is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in Korea by Deutsche Securities Korea Co. and in Singapore by Deutsche Bank AG, Singapore Branch. In Japan this information is approved and/or distributed by Deutsche Securities Limited, Tokyo Branch. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product referred to in this report and consider the PDS before making any decision about whether to acquire the product.