Frankfurt/Main – The investment climate in the German private equity market improved dramatically over the summer. That is the conclusion of the autumn private equity panel survey conducted by CMS Hasche Sigle and FINANCE, which brings together responses from some 40 leading investment managers. Companies from cyclical sectors have shot high up the shopping lists of private equity investors, while loans are now more readily available. The recovery has reached the SME private equity market.
For Dr Tobias Schneider, partner at CMS Hasche Sigle, this is empirical proof of what he has been seeing lately: "Banks are making more external capital available again for financing acquisitions. Some banks are now willing to handle financing of up to EUR 100 million on their own. Having said that, the various processes still take longer than before the financial crisis. In addition, financial institutions want to know exactly what kind of targets they are dealing with."
The more optimistic outlook for the economy and improved access to credit should make it easier for private equity investors to meet the ambitious price expectations of sellers than in the first half of the year, and to do that more often. "PE investors are again able to make competitive offers. As a result, a number of PE investors have recently bid successfully for attractive targets," reports Dr Joachim Dietrich, partner at CMS Hasche Sigle.
Thanks to the increased competitiveness of private equity investors, the difference between asking prices and offers may well have gone down over the summer. A notorious price gap had long been an obstacle to recovery in the private equity market. Going forward, robust transaction activity can be expected in the fourth quarter.
Those are the key findings of the autumn survey of the private equity panel that CMS Hasche Sigle polls three times a year in conjunction with specialist magazine FINANCE. The panel includes leading representatives of more than 40 different private equity funds that invest in Germany.