DBAG initiates another private equity fund

Jonathan Boyd
DBAG initiates another private equity fund

Deutsche Beteiligungs, (DBAG) the listed private equity company, has initiated another private equity fund with commitments of more than €1bn.

The DBAG Fund VIII follows the VII fund, which closed in 2016. DBAG itself will co-invest some €225m, an increase of 25% compared with the co-investment in the VII fund.

Assets under management and advisory by DBAG Group amount to €1.7bn, but with the new DBAG Fund VIII, the figure is set to rise to around €2.5bn. Net income at DBAG in the 2018/19 year was €45.9m, up from €29.7m the previous year. It said the results were driven by the focus on sectors including broadband telecoms, IT services/software and healthcare.

The target level of the VIII fund is €1.1bn, including co-investments made by DBAG. The fund is expecteed to be completed by early 2020. It will focus investments in the size range €40-100m.

Consisting of two sub-funds, the main fund targets a volume of €900m, including €210m of co-investments by DBAG. A "top-up fund" will target volume of €200m, including €45m co-invested. DBAG states this will facilitate larger transactions, including investments of up to €220m per transaction.

The fund launch co-incides with the decisoin to focus the manager's activities on long-term minority stakes in owner-managed mid-market businesses.

Torsten Grede, spokesman of the Board of Management at DBAG, said: "It became evident during the financial year under review just how attractive such non-controlling shareholdings in family-owned enterprises can be, with the successful sales of Novopress and inexio. When presenting the consolidated financial statements 2018/2019...these two disposals account for more than half of net gains and losses on measurement and derecognition 2018/2019."

DBAG's previous strategy, initiated in 2013, saw it start to shift away from traditional core sectors including mechanical and plant engineering, automotive suppliers, industrial services and industrial components. But with a recession in the German industrial sector, there has been a weakening in the operating performance of some portfolio companies.

DBAG's group return on equity has averaged 11.5% over the past decade, the company states.

Susanne Zeidler, DBAG's chief financial officer, added: "Tanks to larger co-investments, net asset value will rise strongly over the medium term, whilst net income from Fund Investment Services will already show a marked increase in the new financial year. In this way, we will see strong momentum to increase DBAG's company value - our core objective."

Still, in the short term, the business is cautious in its outlook for 2019/2020.

Grede said of the board of management: "They feel the uncertainty - especially from structural changes in the automotive industry, but also from international trade conflicts."


Key financial indicators (IFRS)



Segment result - Private Equity Investments

€42.1 million

€24.2 million

Net asset value

€472.1 million

€470.7 million

Segment result - Fund Investment Services

€3.0 million

€5.6 million

Net income

€45.9 million

€29.7 million

Return on equity per share

9.1 %

6.9 %

Dividend per share (2018/2019 proposal)






Jonathan Boyd
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Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.