Deutsche Beteiligungs AG closes eighth fund; announces half-year results

Simpson Thacher and P+P Pöllath + Partners provided legal advice for the fundraise. The fund was launched in June 2019, as reported.

The eighth fund is slightly larger than its predecessor, which closed in July 2016 on €1bn. Like its predecessor, the fund comprises a principal fund and a top-up fund. The principal fund has commitments of more than €910m and the top-up fund has commitments of €199m. The GP has committed €210m and €45m to the funds respectively.

DBAG also announced its half-year financial results, which it said in a statement were notably marked by the coronavirus pandemic. Its portfolio NAV fell by €359m, accounting for 20.2% of the total value. The GP said that its forecast for this financial year expects NAV to be up to 10% lower by 30 September 2020.

However, net income from fund investment services came to €3.5m, surpassing the €1.8m earned in the same period last year. The GP expects the total figure to be more than 20% higher than the previous year's in 2020.

According to the same statement, the GP ended the first half of the 2019/20 financial year with a negative net income of €76.7m, compared with a positive net income of €7.6m in the first half of 2018/2019.

Investors
The fund had a preliminary re-up figure of 75% on its first close and now has re-ups amounting to 86% of the total volume, compared with 80% in its previous fund.

The GP said in a statement that its LP base remains largely unchanged compared with its seventh fund. However, new investors include a Dutch pension fund, a UK-based foundation and a US asset manager. Pension funds have committed 36% of the capital in the fund. Insurance companies have committed 25% and family offices account for 12%.

Of the fund's capital commitments, 70% are from Europe-based investors and 30% are from Germany. Almost 10% of the commitments are from Asian investors, while US investors have committed to 20% of the fund volume.

DBAG has made a total GP commitment of €255m.

Investments
The vehicle will write equity tickets of €40-100m for companies with enterprise values of €75-250m. However, the fund can write equity cheques of up to €220m with the use of the top-up fund. It will also consider co-investments.

DBAG will continue to focus on Germany-based Mittelstand companies, but will also consider investments in Austria and Switzerland. The fund has not yet made any investments, but will focus on DBAG's core sectors, as well as new focus on broadband and telecommunications, IT services, software and healthcare.

The GP's recent deals include various add-ons for its portfolio companies in the broadband and telecommunications sectors, including the acquisition of Telewenz by DBAG VII portfolio company Vitronet.

People
Deutsche Beteiligungs AG – Torsten Grede (spokesperson for the board of management).

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