Mid-market private equity firm Deutsche Beteiligungs has suffered a €51.1 million loss from its aggregated net asset value for the year ending 31 October 2008.
Deutsche Beteiligungs said the loss stemmed from “unrealised valuation changes” and had virtually no effect on the company’s cash position.
The firm’s net asset value per share declined from €25.09 at the beginning of the year to €17.90 at 31 October 08.
Other publicly listed firms have also been plagued by fair value issues in recent months, including The Blackstone Group, which wrote down a third of its private corporate investments within its private equity portfolio in December; Apollo Alternative Assets, the global buyout firm's Euronext-listed investment vehicle, wrote down its assets by more than $530 million, for the nine months ending 30 September; in November Electra Private Equity wrote down all but one of its unlisted investments for the year ended 30 September reducing its portfolio by 26 percent, or £134 million.
At its upcoming annual meeting Deutsche Beteiligungs will recommend that shareholders receive dividends of €0.40 per share as opposed to last years’ distribution of €3.50 per share. The dividend will be paid from the retained earnings and profits from last year.
Banking giant Deutsche Bank was a founding shareholder in the private equity firm, but divested its 13.1 percent or 2,000,000 shares in the firm in 2007, for approximately €62 million.
In the previous financial year the company recorded profits of €136.5 million, however the firm’s share price was still volatile, dropping from €32 at the beginning of July 2007 to €26.30 in September 2007.
As of 31 October 2008 Deutsche Beteiligungs had cash funds of approximately €105 million. The firm bills itself as Germany’s oldest private equity house.
The firm has decided not to make any predictions for the financial year beginning 1 November 2008. ” We are able to foresee neither the value trend in the equity markets, nor the depth and length of the economic crisis,” spokesman for the board, said in a statement.