Mood brightens on the investment market

Frankfurt (ots) -

- Relatively optimistic economic forecasts provide a stimulus
- Contrary trends: late-stage financiers make clear progress, but
early-stage segment is stagnant

Relatively optimistic economic forecasts are bringing a positive
mood to the German investment market in spring 2013. The German
Private Equity Barometer climbed 7.6 points to 40.1 during the first
quarter, surpassing its long-term average by 4 points. Gains were
evident both in the current business position and in business
expectations for the next six months (+1.5 and +13.8 respectively).

Positive judgments being expressed on other factors are also
helping to brighten the business climate: investment companies report
an increasing demand for investment capital, and note that the
business plans being submitted are of a very high standard.

However, at present the two segments of the German Private Equity
Barometer are showing different trends: whereas sentiment among
late-stage financiers on the investment market demonstrates a marked
upturn (+8.6 points), the early-stage segment is virtually stagnant
(+2.1 points). The main reason for this is the great reticence that
investors continue to show towards early-stage investment, with the
result that access to funding for deal finance remains difficult in
this respect. In contrast, late-stage financiers, who frequently use
leveraging to finance their transactions, are benefiting from good
access to credit and the present low level of interest rates.

Dr Jörg Zeuner, Chief Economist at KfW, comments as follows on the
latest German Private Equity Barometer results: "Market conditions
are positive, and institutional investors are searching hard for
high-yield investment opportunities. This should really be making
fundraising easier for early-stage financiers. What we are finding
instead is that more than half of them still see the fundraising
situation as poor. This is a problem: there is a lack of private
funds to finance innovations, even though the quality of the
investment proposals submitted seems to show promise. "

Ulrike Hinrichs, Managing Director of BVK, adds: "Although
fundraising is a challenge for every investment company at the
present time, I am optimistic that German venture capital companies
will stand their ground against their rivals in the international
competition for capital. Institutional investors know the value of
Germany as an investment location. Its attractiveness is borne out by
a number of factors, not least the very positive assessments
expressed by investment companies with regard to deal flow quality
and volume, and the extremely promising outlook indicated by business
forecasts."

KfW compiles the German Private Equity Barometer jointly with the
BVK exclusively for Handelsblatt. A comprehensive analysis is
available to download at www.kfw.de/gpeb.

Contact:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM) Christine Volk
Tel. +49 (0)69 7431 3867, Fax: +49 (0)69 7431 3266,
E-Mail: Christine.Volk@kfw.de, Internet: www.kfw.de