German listed manager Deutsche Beteiligungs AG (DBAG) is nearing the €1.1 billion target for its eighth flagship offering and top-up fund after around six months in market.
The firm has so far raised over €1 billion for DBAG Fund VIII – about €800 million for the main fund and the remainder for the top-up vehicle – and has seen a re-up rate of more than 75 percent from existing LPs, a spokesman for the firm told Private Equity International.
DBAG raised €255 million, or about a quarter of the fund, from its balance sheet and the remainder from its LPs. Among LPs in DBAG’s earlier vehicles are ATP Private Equity Partners and BMO Private Equity Trust, according to PEI data.
The capital raising target for DBAG Fund VIII is approximately €300 million more than for its 2016-vintage predecessor, which collected €1 billion within just three months, PEI data show.
Fund VIII follows the same strategy as the firm’s previous flagship buyout funds, investing between €40 million and €100 million per transaction. Deals that exceed €100 million will be financed via the top-up fund. It will also back small buyouts with equity tickets of between €20 million and €40 million.
The spokesman noted that the investment financing strategy for the firm as a whole has shifted slightly due to wrapping up its Expansion Capital Fund series this year, which raised nearly €400 million across three funds from 2011-18. ECF made minority investments and backed smaller buyouts, it is understood.
Following the change, DBAG will no longer make any minority investments from the ECF funds but will instead do so through its balance sheet and categorise such investments as “principal investments”, the spokesman said.
As well a change in financing, the firm also expects to back fewer companies in the industrials sector – a move which DBAG has already made over the years, having widened its investment remit from industrials to include automotive and mechanical engineering, IT services and software, healthcare and telecommunications.
The DACH region has consistently been the third most active market in Europe in terms of deal activity since 2010, recording €9.8 billion worth of deals on average annually, according to data from Invest Europe.
However, a slowdown in Germany’s economy could lead to more cautious deployment of capital into 2020. DBAG expects “muted development, especially for industrial companies in its portfolio”, Torsten Grede, a spokesman for DBAG’s board, said in a statement.
“The companies feel the uncertainty – especially from structural changes in the automotive industry, but also from international trade conflicts.”