German GPs cautious on venture

Kim Richters
15 August 2013

Tweet
Facebook
LinkedIn
Google plus
Send to

Kreditanstalt für Wiederaufbau (KfW) and BVK, the German private equity and venture capital association, have published a survey revealing decreased confidence in early-stage investments from local deal-doers in Q2.

The German Private Equity Barometer rates the participating investors' feeling about the German private equity market in points. The higher the points, the more optimistic GPs feel about the German private equity market.

The index dropped by 16.9 points to 28.6 points compared to the previous quarter when it comes to confidence about the local venture capital opportunities. This bout of pessimism is motivated by a decline in the number of start-ups being founded in the country that, in return, is resulting in less demand for venture capital, according to the survey.

The report also reveals that optimism about the German private equity market in general dropped by 3.7 points to 36.5 points in the second quarter of 2013.

However, GPs' faith in later-stage deals improved due to a recent rise in M&A activity. The later-stage deal index increased by 5.4 points to 43.3 points.

Furthermore, participants judged exit possibilities and fundraising conditions better than in the first quarter of 2013. Unquote" recently reported on how the mood across the European venture capital market had picked up among expectations of profitable exits and high returns.

BVK's managing director Ulrike Hinrichs said in a statement: "The mood upswing in the late stage is welcome and also very closely related to the robust economic situation in Germany. The positive outlook gives reason to hope for a successful second half of the year with a lively investment business. The critical mood in the early-stage segment should not hide the fact that venture capital remains of key importance for innovation financing."

BVK and KfW publish the German Private Equity Barometer on a quarterly basis.

KfW is based in Frankfurt and was founded in 1948 as part of the Marshall plan to support the rebuilding of Germany's economy after the Second World War. According to unquote" data, it invests in the consumer service, consumer goods, basic materials, financial, healthcare, industrial, oil & gas and technology sectors. Almost 98% of its capital is invested in Germany.

KfW's latest investment, together with M-Invest, was a €3m capital injection into neurotechnology firm CorTec.