Wilken von Hodenberg: Countdown to 2008

Wilken von Hodenberg, head of Germany's longest established private equity manager, is looking forward to the next 12 months, despite capital market turmoil.

Wilken von

“At Deutsche Beteiligungs, we are confident about the year ahead. Yes, it’s true: turmoil in the capital markets hasn’t the least subsided. As a result, banks will continue to put a squeeze on finance for leveraged private equity transactions and, undoubtedly, credit terms will become tougher and interest margins will be somewhat higher than before. Yet the banks’s increased awareness of risk in their lending also has a positive side. Ideally, it will curb exaggerated leveraged finance and thus return prices for investments to more moderate levels.

The turmoil and overcast sentiment, however, have hardly been felt in the regular business world of our portfolio companies – not, at least, in Europe and Asia. That creates opportunities for their good progress in 2008.

In addition, we are optimistic about the deal flow. In past months, we have witnessed no decline in potential transaction opportunities. And why should we? Selling a company to a financial investor depends on a range of factors, not just the debt capital markets’ current mood.” Wilken von Hodenberg, spokesman for the board of Deutsche Beteiligungs. 

2007 was a successful year for Deutsche Beteiligungs and its funds. Two new management buyouts were financed in April and July, while an existing investment was increased. MCE and Coperion – its two new portfolio companies – are leaders in their field. In July 2007, a part of the shares in Homag Group acquired in February 2007 were profitably sold through the Homag Group’s IPO. The proceeds from this partial sale exceeded the total investment.

In August, the firm signed an agreement on the sale of Dörries Scharmann Technologie. This, too, was a profitable transaction.

Its portfolio companies benefited from the strong business environment, particularly in the mechanical engineering industry, one of the core segments in which Deutsche Beteiligungs invests.

With the price of DBAG shares having soared by more than 50 percent in financial year 2006/2007 (ending 31 October), its shareholders will undoubtedly retain fond memories of 2007.