DBAG raises €434m for fund V

The Frankfurt Stock Exchange-listed private equity firm has held a final close on its fifth fund, ahead of its €375 million target.

Frankfurt-based private equity firm Deutsche Beteiligungs AG (DBAG) has held a final close of its fifth buyout fund on €434 million ($532 million).

DBAG launched the fundraising process for DBAG Fund V in November of last year with a target of €375 million. The new vehicle’s predecessor, DBAG Fund IV, closed in September 2003 with €228 million in commitments, below its original target of €250 million.

Wilken von Hodenberg, spokesman for the board of management at DBAG, told PEO that the new fund was heavily oversubscribed. “We had a hard cap of €430 million and could have done much more,” he said. “The market is very different from three years ago [when fund IV was raised]. Then, GPs were chasing LPs, but now it’s much more of a GP-friendly market.”

Von Hodenberg said that the German mid-market focus of the firm’s funds also helped attract investors. “We’ve been very focused and we have a clear niche in the mid-market in Germany, which investors like and that’s helped us to go through the process in such a short time.”

The fund received commitments from 26 institutional investors, of which around two thirds were international investors, said von Hodenberg.

DBAG was advised on the fundraising process by International Private Equity Limited in London and German law firm Pöllath + Partners, according to a company statement.

DBAG Fund V will continue its predecessors’ strategy of taking majority stakes in German businesses with typical annual sales of between €50 million and €750 million. The firm said that it will invest equity from its own balance sheet alongside the fund in each transaction, in a 1:4 ratio.

DBAG Fund IV has so far made eight acquisitions through management buyouts, one of which, power plant service business Babcock Borsig Service, was sold last March. The sale of axel and suspension system manufacturer Otto Sauer Achsenfabrik was agreed in December but is not due to complete until March. Von Hodenberg said that the fund was now 73 percent invested and has returned 71 percent IRR to investors to date.