Private wealth key driver for investor growth in the region

LONDON, Dec. 14, 2023 (GLOBE NEWSWIRE) — Today Preqin, the global leader in alternative assets data, tools, and insights, published its Preqin Territory Guide: Private Capital in DACH 2023. The report highlights how both Germany and Switzerland now have more than €100bn in assets under management (AUM), pushing the total AUM of DACH*-based fund managers to €238bn in October 2023, which is a growth of over 140% since 2018. 

The report delves into how the DACH region is opening up to private capital. However, this upward trend depends on Germany’s Mittelstand, the country’s small and medium-sized enterprises, who have typically been hesitant to take on private markets’ investment. However, this is changing and will have to continue for Germany to surpass France and the UK.

Number of family offices rise by 140% since 2018  

Private wealth has been a key driver for investor growth in the region, with the number of family offices actively investing in private capital up by over 140% in the five years since 2018, growing from 169 to 415 in 2023. This growth is primarily focused on Germany, where the number of private capital investors has risen by nearly 70% over the same period.  

Number of active GPs in DACH doubles

Private capital is DACH is playing catch-up with its economic rivals with the number of active GPs in the region more than doubling in five years, from 986 in 2018 to 2,084 by the end of October 2023. The most dynamic fund manager growth is happening in private equity and venture capital. Private equity has seen 90% growth in the number of fund managers (669 to 1267), while in venture capital, the figure has doubled (471 to 1006). 

By the end of September 2023, 24 private capital funds had closed at €6.6bn, and this number is expected to rise further by the end Q4 2023. Historic fundraising of venture capital funds across the same period shows 30 funds closed in 2021 with an aggregate value of €2.7bn, rising to 41 closed in 2022 with an aggregate high of €4.7bn. By September 2023, 15 more VC funds had closed at €2.3bn, and the full-year figures will likely top those of 2021, when the global market was at its hottest.  

Germany, DACH’s (and Europe’s) largest economy, is widely expected to return to growth in 2024 with private equity fund managers across Europe seeking access to Mittelstand companies as the economic building blocks of the country, accounting for over 99% of firms, and being responsible for 58.5% of all jobs created**. 

David Dawkins, lead author of the report at Preqin, says, “GPs are setting up shop in DACH to tap into a rich seam of opportunity. Germany’s fabled Mittelstand seems to have changed its tone when it comes to private capital and, as the market matures, we expect that deal flow will begin to resemble that of France and the UK.” 

Additional key findings from Preqin’s Territory Guide: Private Capital in DACH 2023 include: 

• Private debt: Fundraising is climbing steadily as opportunities take shape around the evolving economic landscape. In 2021, 8 funds closed at €1.4bn, then 7 in 2022 at €3.1bn. By the end of Q3 2023, 4 funds had closed at €4bn.
• Real estate: In 2021, 41 funds closed, raising an aggregate €7.9bn. However, the following year, that number fell to 17 with €2.7bn raised, then decreased again in the first three quarters of 2023, as 7 funds raised €1.5bn. 
• Venture capital: AUM in DACH was €32.3bn by the end of 2022, having climbed from €26.6bn a year earlier – the latest AUM data available.

For more information, and to receive a full copy of the report contact Dawn Bowles, [email protected]

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Notes to the editors

* The DACH region covers Germany, Austria, and Switzerland.
**Cited from Deutsche Börse: https://deutsche-boerse.com/dbg-en/our-company/knowledge/financial-market-know-how/mittelstand#:~:text=For%20the%20German%20government%2C%20all,up%20to%20%E2%82%AC43%20million

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Preqin, the Home of Alternatives, empowers financial professionals who invest in or allocate to alternatives with essential data and insight to make confident decisions. It supports them throughout the entire investment lifecycle with critical information and leading analytics solutions. The company has pioneered rigorous methods of collecting private data for over 20 years, enabling more than 200,000 professionals globally to streamline how they raise capital, source deals and investments, understand performance, and stay informed. For more information visit www.preqin.com.