Deutsche Beteiligungs has raised €121 million for its fourth fund, DBAG Fund IV. It is the first time the listed private equity group has raised money from investors outside the company’s principal shareholder base. The firm now has €100 million available, from its own assets and the new fund, to invest annually.
Fund IV is sponsored by Deutsche Bank and Gerling, two of Deutsche Beteiligungs’ major shareholders. It has attracted a total of 11 institutional investors from Germany, the rest of Europe and the US, including three family offices and three fund-of-funds. Members of the firm’s investment team have also made commitments. The fund is expected to reach its ultimate target of €250 million for a final close in January 2003. “This very satisfactory first closing is proof of investors’ confidence in Deutsche Beteiligungs AG’s investment team, which has invested very successfully in past years,” said Wilken von Hodenberg, spokesman of Deutsche Beteiligungs’ management board.
In line with the company’s previous investment strategy, the new fund will invest in management buyouts in German-speaking countries. “The business environment and stock market crisis currently create very excellent acquisition opportunities,” said von Hodenberg. The fund will be invested over the next three to five years, making equity investments of between €10 million and €60 million to acquire majority holdings in growing mid-sized businesses. Target companies will generate annual sales of between €50 million and €500 million.
In the firm’s 37-year history Deutsche Beteiligungs has provided 49 portfolio companies with euro327 million, funds managed by the group have invested another euro200 million. Fund IV has already made investments in automotive supplier, AKsys GmbH and Hochtemperatur-Engineering, formed from the industrial engineering business of RHI AG, meaning 15 per cent of the fund’s target size has been committed.