Handelsblatt Jahrestagung Private Equity in Munich

The draft bill of the Modernisation of the Basic Conditions for Private Equity Participation (MoRaKG) once again took centre stage at the Handelsblatt private equity conference in Munich.

During the first day of this annual conference, which brings together a range of industry players, the bill was once again criticised for its inability to provide a consistent and reliable, if not favourable framework for private equity investments in Germany.

In his keynote, Thomas Putter, CEO of Allianz Capital Partners, stressed the importance of private equity for a prospering economy, where venture capital is taking the role of funding research and development of new business ideas and technologies, while buyout funds are responsible for helping businesses grow and become more efficient. Later in the day, a few interesting case studies of private equity-backed businesses were presented, such as that of rubber floorcoverings company nora systems GmbH or kitchen manufacturer ALNO AG. Of particular interest to the audience were the different experiences company management and private equity investors had made during the buyout process as well as how private equity involvement had significantly strengthened and grown the businesses.

The second day provided an array of different topics, starting with an address by Dr Martin Berlin, COO at Tatweer Dubai, on the re-shaping of the Dubai economy - away from oil revenue dependency and towards financial and tourist centre. Philippe Roesch, Managing Director at Auda, then gave an insight into his method of picking private equity funds, and the following panel debated the importance of organic growth as a key factor to successful private equity investments. Here, Dr Stefan Hepp from SCM Strategic Capital Management, was keen to highlight that creating organic growth cannot be singled out for being responsible for a successful private equity investment, but that financial structuring has to take just as much credit. Depending on the economic cycle, private equity investors would focus more on organic growth or on financial structuring, and that applying both is a key factor to success.

As the afternoon session of the last day at a conference is notorious for a fast dwindling audience, it was refreshing to see a fully packed room listening to what for many was the best presentation of the conference. Oliver Kehren of Morgan Staley tackled the topic of the moment in his overview of the current developments in the debt market, explaining the causes of the credit crunch and the current repricing of risk.

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