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Downturn? Current developments in the private equity sector
There is a lot of investment capital in the market. In addition, the number of private equity companies continued to grow. Therefore, in relative terms, there are fewer investment opportunities and the different characteristics of private equity houses are becoming more important. Especially for medium-sized companies, it is very important to know with whom they are meeting. We therefore always advise entrepreneurs to take a very close look at their new private equity partner in advance. HANNOVER Finanz, for example, distinguishes itself through its Evergreen funds, 40 years of experience in investing in medium-sized companies, and its network of experts that has grown over four decades.
Currently, against the backdrop of a possible downturn, private equity houses are becoming increasingly choosy and also cautious, and prefer to invest in non-cyclical sectors — and thus valuations for such companies continue to rise. However, this could also create opportunities for experienced investors in cyclical sectors such as automotive, plant and mechanical engineering, or trade and retail. HANNOVER Finanz, for example, was very successful with this strategy during the last financial and economic crisis.
Digital due diligence is, of course, an integral part of due diligence for us and is on the agenda for almost every investment opportunity. However, we do not see this as a separate component, but address the issue as part of commercial due diligence — often together with relevant experts from our network. This now applies to all industries.
Let us say in advance: Local representative offices in the sense of branch offices are not our means of choice. The headquarters in Hanover and our Austrian office in Vienna will remain in place. We are a small team, live from personal exchange and are on the road a lot, in all federal states. Our employees from Baden-Württemberg, Bavaria or Berlin also have their permanent office in Hanover. However, it is very helpful that we have strengthened our presence in southern Germany, for example, with Joachim von Lohr — formerly a member of the management of SüdBG and at home in Baden-Württemberg. In the future, he will also be the contact person for inquiries from Switzerland. Other employees also bring local color to certain regions and have corresponding local networks.
In addition to our own employees, however, a nationwide network of M&A houses or entrepreneurs in whose companies we have held a stake in the past is an important element of our strategy in the search for interesting investment opportunities.