Strong DACH fund manager growth shows region opening up to private capital — Preqin reports
17 July 2024 - 7:15AM
UK Regulatory
Strong DACH fund manager growth shows region opening up to private
capital — Preqin reports
Germany’s private capital assets under management (AUM)
increases from €130bn by the end of 2022 to €150bn by September
2023
FRANKFURT, Germany, July 17, 2024 (GLOBE NEWSWIRE)
-- Preqin, the global leader in alternative assets data, tools, and
insights, today published its Preqin Territory Guide: The
Rise of Private Capital in DACH 2024 report. The
report shows that DACH, a region covering Germany, Austria, and
Switzerland, could drive the next wave of European private capital
growth with over €70bn in dry powder waiting to be
deployed.
Germany’s Mittelstand remains a focal point for private
capital growth
Of the countries that make up the DACH region, Germany has the
highest private capital AUM according to Preqin data, at almost
€150bn, ahead of Switzerland with almost €112bn, as of September
2023*. A key but largely untapped business group for private
capital is Germany’s Mittelstand**, which represents over 99% of
German businesses and has a reputation for innovation. The report
highlights that here lies strong potential for private capital
dealmaking and AUM growth.
Private fund managers have traditionally made few deals in the
Mittelstand, with Preqin data showing that Mittelstand buyout deals
activity, from 2018 to June 2024, has not increased. In 2018, 89
deals were captured, in 2021 63 were, and in 2023 there were 44.
However, the €12bn acquisition of Viessmann Climate Solutions by
Florida-based Carrier Global Corporation in December 2023 could
suggest a gradual warming up to overseas ownership.
Switzerland dominates DACH private
fundraising
Switzerland had eight of the ten largest DACH private fund
closes from 2018 to June 2024 – the largest being over €5bn at
final close, by Switzerland-based Partner Group’s Direct
Infrastructure III fund in 2022. The other two largest funds closed
outside of Switzerland were Germany-based, with the largest of
these two being Allianz Global Investor’s Diversified Private Debt
Fund I, at over €3bn by final close in 2023.
David Dawkins, lead author of the report, says:
“In Germany, the question of how fund managers navigate the
invisible labyrinth between themselves and the Mittelstand over the
coming years remains unanswered. That said, attitudes are changing
at a time when a new generation of owners are starting to take the
reins. This bodes well for private capital on the approach to a new
cycle and a new era of growth.”
Additional key findings include:
- DACH private equity fundraising: Preqin data
shows that the number of DACH-based private equity funds that
closed fell from 51 in 2022 to 46 in 2023. Aggregate capital raised
from 2022 to 2023 also fell, from over €22bn to almost €13bn.
- Growing role of family
offices in DACH: The number of DACH-based family offices
has risen from 115 in 2019, to 471 by June 2024. This growth could
lead to further private capital deployment in the region, through
like-minded entrepreneurs’ private wealth being utilized.
- Active DACH-based private capital investors:
The number of private capital investors increased across all types
from 2019 to June 2024. Family offices now represent the largest
investor type, followed by private sector pension funds, of which
there were 155 in 2019 and 166 by June 2024.
Note to editors:
*Preqin has a six-month lag in its AUM analysis
to ensure it has a complete dataset as possible when calculating
values.
**The Mittelstand is defined as businesses with up to 499
employees and annual revenue of less than €50 million in Germany,
according to the German government.
If you would like more information or would like
to speak with the report author, please contact Oliver Keyser at
oliver.keyser@preqin.com
About Preqin
Preqin, the Home of Alternatives™, empowers
financial professionals who invest in or allocate to alternatives
with essential data and insight to make confident decisions. It
supports them throughout the entire investment lifecycle with
critical information and leading analytics solutions. The company
has pioneered rigorous methods of collecting private data for over
20 years, enabling more than 200,000 professionals globally to
streamline how they raise capital, source deals and investments,
understand performance, and stay informed. For more information
visit www.preqin.com.