German firms enjoy lightning fundraises

Deutsche Beteiligungs and Equity Capital Management have each held closes for their latest Germany-focused funds, having garnered a combined €681m in commitments.

The country's football team may have crashed out of the European championships at the semi-final stage, but Germany's private equity industry – like its economy – appears to be in robust health on the evidence of two rapid fund closes in the past few days.

Frankfurt-headquartered Deutsche Beteiligungs (DB) has raced to a first close for DBAG Fund VI with €451 million in commitments, having dispatched private placement memoranda just two months ago. The fund's target is €650 million, with a final close expected in “a few weeks' time”, according to the firm.

Placement agent Campbell Lutyens is advising on the fundraising, with Poellath & Partners and Carey Olsen handling the legal side.

The fund will target mid-market buyouts in German-speaking Europe, DB said in a statement announcing the close.

This is a strong vote of confidence in our ability to identify the ‘hidden champions’ within the Mittelstand

Torsten Grede, Deutsche Beteiligungs

DB said about 80 percent of the capital raised to date came from institutional investors, with the remainder accounted for by a co-investment commitment from the GP itself. The GP will co-invest alongside the fund in a ratio fixed throughout the fund's lifetime, it said.

“This is a strong vote of confidence in our ability to identify the ‘hidden champions’ within the Mittelstand and deliver outstanding returns to investors”, said Torsten Grede, a member of DB's board.

A second German firm has also raced towards a close for its latest fund. ECM Equity Capital Management (ECM) held a final closing for its Germany Equity Partners IV fund last week, having formally launched the process in February. The fund reached its hard cap of €230 million, surpassing its target of €200 million.

ECM said it had significantly broadened its investor base through commitments from more than 20 LPs, including funds of funds, insurers, family offices and pension funds. More than half the LPs in ECM's previous fund re-upped, the firm said in a statement. The geographical breadth of ECM's LP base also increased, with about 30 percent of commitments from German institutions, 40 percent from the rest of Europe, and the rest from North America.

ECM, which was advised by O'Melveny & Myers, SJ Berwin and placement agent Park Hill Group, said the fund would continue its prior strategy of making eight to 10 investments over a five year period in companies based in German-speaking countries.

A roundtable discussion featuring leading figures in the German private equity market can be found in the July / August edition of Private Equity International magazine.