The German economy is based on private equity

Many top managers of large corporations are satisfied with the private equity business. Financial investors are valued as fire extinguishers and catalysts. A recent study shows this. Two aspects in particular are the essence and the end of a good partnership.

Studies and research on trends and developments in the corporate banking sector, including corporate and investment banking.

The German economy gives mostly positive feedback to the private equity sector. This is shown in a study by the management consultancy firm Staufen, which was interviewed with around 200 top managers – owners, shareholders, board members or managing directors, half of whom come from industry, commerce (18%) or the service sector (31%). ). Only companies with an annual turnover of at least EUR 20 million were included in the study by Staufen. One-third of the companies have an annual turnover of more than EUR 100 million.

Private equity reputation

Consequently, the private equity sector enjoys a good reputation in the economy. Investors would be needed and appreciated. For example, 82 percent. of the surveyed managers believe that financial investors, as active partners, could provide support in difficult situations. However, companies wanted replacements at eye level.

According to their own statements, two-thirds of the surveyed company representatives do not have any prejudices against financial investors. Eight out of ten managers even assumed that they could manage a potential change faster than other owners.

This requires a good private equity partnership

The basis of successful cooperation is a partnership based on shared values, such as excellent industry know-how, the study concludes. The combination of entrepreneurial creativity and well-funded financial knowledge can only realize its full potential when there is mutual understanding.

The authors of the study warn, however, that a careful partner selection must be made: owners would often decide solely on the basis of an attainable price. More important, however, is the question of whether the buyer fits the business. An investor profile contains important features that can determine the success or failure of a partnership. The seller should therefore deal with prospective buyers in advance to avoid misunderstandings and disappointments.

The investor acts as a fire extinguisher and catalyst

Due to disrupted supply chains, the private equity industry faces many inquiries and new tasks, the authors of the study write. Financial investors are often sought as firefighters and catalysts. Usually, fresh capital is needed because financial difficulties are imminent, financing growth or opening new markets is necessary.

This has to improve on the business side

However, the authors of the study identified weaknesses on the business side: As financial experts, they are well versed in all aspects of “financial engineering”. However, depending on the industry’s commitment, in-depth insight into the workshops is also required – as great potential is usually no longer hidden in the balance sheets. Instead, it is about harmonizing systems, optimizing the organization and achieving the SDGs.

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