Private Equity - Germany

Germany

The deal value in the Private Equity market is projected to reach €42.42bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 4.05% resulting in a projected total amount of €44.14bn by 2025.
The average size per deal in the Private Equity market amounts to €74.54m in 2024.
From a global comparison perspective it is shown that the highest deal value is reached in the United States (€550,900.00m in 2024).
In the Private Equity market, the number of deals is expected to amount to 0.68k by 2025.

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Analyst Opinion

The Private Equity market in Germany is facing a subdued decline, influenced by factors such as economic uncertainty, tightening monetary policies, and increasing competition for attractive investment opportunities, which have collectively impacted growth rates.

Customer preferences: The Private Equity market in Germany is witnessing notable shifts as investors prioritize sustainable and socially responsible investment opportunities. There is a growing demand for companies that demonstrate environmental, social, and governance (ESG) criteria, reflecting a broader cultural push toward sustainability. Additionally, the aging population is prompting increased interest in health tech and senior care investments, as demographic shifts highlight the need for innovative solutions in these sectors. This evolving landscape presents unique opportunities for private equity firms to align with changing consumer values.

Trends in the market: In Germany, the Private Equity market is increasingly focused on sustainable investments, with a marked shift towards companies meeting stringent ESG criteria. The rise of impact investing reflects a broader commitment to responsible stewardship of capital. Additionally, the aging population is driving notable investments in health tech and senior care, as firms seek innovative solutions to address demographic challenges. This trajectory not only aligns with evolving consumer values but also presents significant opportunities for private equity firms to enhance their portfolios and deliver long-term, sustainable growth.

Local special circumstances: In Germany, the Private Equity market is shaped by a robust regulatory framework that emphasizes corporate governance and transparency, distinguishing it from other European markets. The country’s strong focus on ESG compliance is influenced by cultural values prioritizing environmental sustainability and social responsibility. Furthermore, the geographical concentration of innovative tech hubs, particularly in Berlin and Munich, fosters a vibrant startup ecosystem. This unique blend of regulatory rigor, cultural emphasis on sustainability, and regional innovation drives private equity firms to pursue investments that align with both economic growth and social impact.

Underlying macroeconomic factors: The performance of the Private Equity market in Germany is significantly influenced by macroeconomic factors such as central bank policies and interest rates. As the European Central Bank adjusts rates in response to inflation and economic growth, the cost of borrowing for private equity firms fluctuates, impacting their ability to finance acquisitions and leverage investments. Lower interest rates typically enhance deal-making activity by reducing financing costs, thus encouraging more buyouts and investments in growth-oriented companies. Conversely, rising rates can constrain capital availability and lead to tighter valuations, compelling firms to be more selective in their investment strategies. This dynamic ultimately shapes the overall growth trajectory of the private equity landscape in Germany.

Methodology

Data coverage:

The figures are based on deal value, number of deals, the average size of each deal, and assets under management within the Private Equity market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, total investment (% of GDP), household wealth (per Adult), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are total investment (% of GDP), household wealth (per Adult), number of high-income persons, and number of high-net-worth individuals (HNWI).

Additional notes:

The market is updated twice a year in case market dynamics change.