Table of contents
Executive Summary
Here is a summary of our key findings:
Entries — PE-backed entries in the DACH region have returned to their pre-pandemic levels. By sector, the share of industrial entries is declining and TMT is seeing increased demand. Add-on activity remains robust and at a multi-year high.
Exits — Although the pace of exits has slowed compared to 2021, it has stabilized. The share of strategic exits is on the rise, up from 40% of all exits in 2018 to 50% in 2023.
Largest global investors investing in DACH region — Advent International has emerged as the largest investor investing in the DACH region, managing a total estimated EV of €18.2bn in DACH, followed by Cinven (€13.3bn) and CVC (€12.7bn).
Largest DACH HQ’d investors investing across Europe — Partners Group has emerged as the leading DACH HQ’d investor, managing a total estimated EV of €23.2bn across Europe. Closely following are Allianz Capital Partners (€16.9bn) and DWS Group (€7.1bn). The largest DACH HQ’d investors rarely invest outside of the DACH borders.
PE portfolio stats — Growth and margins for PE-owned assets in DACH remain robust. PE penetration rates stand at around ~10%. By geography, half of all PE-owned assets are based in 3 western German regions: Bayern, Nordrhein-Westfalen and Baden-Wurttemberg.
If you have any questions about the data or the report, do not hesitate to reach out to sid.jain@gain.pro.
Chapter 01: Entries
Overall PE Entries
PE-backed entries in the DACH region have returned to their pre-pandemic levels in 2023. With interest rates stabilising and macro confidence improving, investors are returning to dealmaking. 2021 clearly stands out as an outlier, setting a challenging bar for future years.
Compared to the Rest of Europe, deal activity remains slightly subdued in DACH, down 5% from 2018. While 2021 saw a surge in transactions, marking an exceptional year for the region, activity has since normalized, returning to more typical patterns observed before the pandemic-driven boom.
Chapter 02: Exits
Year-to-date, exit activity in the DACH region is following a similar trend to 2022 and 2023. Although the pace of exits has slowed compared to 2021, the market appears to have reached a point of stability.
By quarter, DACH exit volumes also seem to have stabilized. Improving overall market conditions, higher availability of credit and increased LP pressure are all contributing to this.
Chapter 03: Largest Investors
Advent International has emerged as the largest investor investing in the DACH region, managing a total estimated EV of €18.2bn in the region, followed by Cinven (managing an EV of €13.3bn) and CVC (€12.7bn).
Other investors in the top 10 include Hellman & Friedman (€12.2bn), KKR (€11.6bn), Triton (€9.6bn), Permira (€9bn), Apollo Global Management (€8.5bn), GIC (€7.5bn) and Carlyle (€7.2bn). Collectively, the top 50 investors in DACH manage an estimated EV of €227bn, with the top 10 alone managing an estimated EV of €110bn (~48% of total).
It is surprising that none of DACH HQ’d investors rank in the top 10. Partners Group HQ’d in Baar, Switzerland ranks 13th (estimated EV in DACH of €5.9bn), Deutsche Beteiligungs ranks 16th (HQ — Frankfurt, EV — €4.4bn) and Allianz Capital Partners ranks 21st on the list (HQ — Munich, EV — €3.8bn).
Chapter 04: PE Portfolio Insights
It is no surprise that the Industrials sector makes up the largest share of DACH PE portfolio (29% of assets), given its importance to the German economy. Compared to the Rest of Europe, DACH PE assets are also underweight Services (-6pp) and Consumer (-3pp) and overweight Industrials (+12pp).
PE penetration in DACH is highest in MedTech, Software and Infrastructure. While MedTech boasts one of the highest growth rates, Software is a high-margin subsector, Infrastructure assets typically generate predictable, long-term cash flows making them suitable for PE-backing.
Methodology
The data for this report comes from Gain.pro.
Entries & Exits
We define PE-backed entries as those in which a PE firm took a minority or majority stake. We define PE-backed exits as those in which a PE firm sold a minority or majority stake. We exclude any VC rounds from our analysis. Both entries and exits also exclude live and aborted deals.
Unless otherwise stated, we only focused our analysis on assets HQ’d in the DACH region.
Financials
Unless stated otherwise, the financial metrics in the report are last reported. Where possible, we have used 2023 metrics. In cases where 2023 numbers are still being reported, we have relied on 2022 metrics.
For metric calculations, we only included assets that had a hand-curated profile on Gain.pro (12-14+ hours of primary research).
Rankings
We take a novel approach to our ranking, which is based on total managed enterprise value (EV) in Europe.
At Gain.pro, we track over 11,900 investor portfolios in detail. We calculate EV for each asset in the investors portfolio by multiplying the assets’ EBITDA by a predicted exit multiple, and sum it up. Where EBITDA numbers are not available, we estimate it based on investors’ other holdings.
We only consider majority buyout and minority-owned PE assets for our rankings. We exclude any VC investments and publicly listed stakes. We also adjust for ownership share.
We leverage the assets’ sector, size, growth rate, margin profile and cash generation to predict its predicted exit multiple.
Further, we exclude any inactive investors from the largest global investors in DACH ranking with: i) <3 portfolio companies in DACH; ii) <2 entries in DACH since 2018 and iii) <2 positive portfolio EBITDA values.
For the largest DACH HQ’d investors rankings, we exclude investors with: i) <5 portfolio companies in Europe; ii) <5 entries since 2018 in Europe and iii) <3 positive portfolio EBITDA values.
