Business climate in the German private equity market remained very good at the end of the year

Frankfurt am Main (ots) -

- German Private Equity Barometer continued on a high level in the
final quarter of 2017
- Early stage: fundraising climate surges to another record high
- Later stage: dissatisfaction over entry prices remains

The business climate in the German private equity market remained
on a very high level in the final quarter. At 66.1 balance points,
the business climate index of the German Private Equity Barometer
ended the year only 4.0 points below the previous quarter's record
level. The indicator for the current business situation rose slightly
by 1.1 points to 71.6 balance points. Expectations were down 9.1
points to 60.7 balance points.

Top marks for fundraising conditions, the write-down and
innovation climate and the exit and promotional environment made the
fourth quarter symbolic of the record sentiment in 2017. The only
factor souring sentiment is the persistent gloom over entry prices.

The business climate in the early-stage segment remained very good
thanks to record marks given for fundraising and the promotional
environment at the end of the year. The relevant indicator fell
slightly by 3.4 points to 65.6 balance points in the fourth quarter.
The indicator for the current business situation was nearly
unchanged, rising 0.2 points to 66.9 balance points. The indicator
for business expectations was down 7.1 points to 64.4 balance points.

The later-stage segment ended the year with a moderate decline on
a high level. Despite improved assessments of the quantity and
quality of deal flow, persistent dissatisfaction over entry prices is
dragging down sentiment. The sentiment indicator dropped moderately
by 4.5 points to 66.6 balance points in the final quarter. The
indicator for the current business situation rose by 1.6 points to
75.3 balance points. The indicator for business expectations was down
10.7 points to 57.8 balance points.

"Investors' assessment of start-ups' innovative strength is
currently keeping pace with the development of VC entry prices", said
Dr Jörg Zeuner, Chief Economist of KfW. "Therefore, on average the
higher valuations also reflect higher growth prospects when they are
successful. It is normal for different investors to arrive at
different assessments of the potential success of innovative
technologies and business models. That is also why opinions vary on
what is a reasonable price. Of course, it is important to keep an eye
on how entry prices develop."

Ulrike Hinrichs, Managing Director of the German Private Equity
and Venture Capital Association (BVK), took a positive view of the
year: "It has been an outstanding year for the German private equity
market. Sentiment is extremely good across all segments. This should
translate into record investment and fundraising figures. The good
assessment of the fundraising and exit environment is particularly
pleasing and makes us optimistic about the year 2018. The ambitious
valuations are likely to continue for the time being, but they also
provide opportunities on the exit side."

KfW calculates the German Private Equity Barometer exclusively for
the Handelsblatt together with the Bundesverband deutscher
Kapitalgesellschaften e.V. (BVK; German Private Equity and Venture
Capital Association). You can find a detailed analysis with a
spreadsheet and graph for the latest German Private Equity Barometer
at www.kfw.de/gpeb.

Contact:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM), Wolfram Schweickhardt,
Phone: +49 (0)69 7431 1778, Fax: +49 (0)69 7431 3266,
E-Mail: Wolfram.Schweickhardt@kfw.de, Internet: www.kfw.de

Original-Content von: KfW, übermittelt durch news aktuell