Recognizing opportunities with the right know-how.
The general term “private equity” refers to the capital invested in unlisted (i.e. privately held) companies and covers various forms of equity investments such as buy-outs, growth capital and venture capital.
Private equity funds invest into companies that have the potential to gain value over time. The aim of private equity funds is to improve the competitiveness of the portfolio companies, which in turn increases the value of the capital invested.
The entry of a new investor creates opportunities for the company, such as a new strategic focus, the opening up of new markets, the development of new products and the acquisition of competitors. Private Equity offers not only capital, but also comprehensive know-how from experienced entrepreneurs and industry experts.
Venture Capital refers to private equity provided to young, innovative companies, whose future success cannot be easily predicted. In Germany, venture capital is therefore often referred to as “risk capital”.
The main focus of German venture capitalists has recently been on technology companies. Last year, 70% of all venture capital investments were made in the fields of medicine and biotechnology, software, cleantech and electrical, machine and plant engineering.
The returns of European and German venture capital funds have improved steadily over the last few years and are now comparable to those of American funds. At the same time, yield expectations with regards to equities and bonds in the medium and long term have fallen significantly.
As a result, investor groups (for example family offices and corporate venture capital companies) are increasingly entering the venture capital market in order to participate in the growing attractiveness of the investment class venture capital.