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.
