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10 Jahre deutsche Buyouts

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  • Schalast, Christoph
  • Stralkowski, Ingo

Abstract

Private equity has seen an impressive activity surge in Germany over the last ten years. This working paper meets the increasing thirst for information on the German buyout market with an overview of its historic development, a quantitative analysis of its performance and a future outlook. While the authors’ findings show an outperformance of buyout-financed businesses with regard to sales growth on CAGR basis, profitability growth and capex expansion, significant underperformance in terms of interest coverage levels and equity funding becomes apparent. This is in contrast to studies conducted by private equity associations and consultancies, and gives some validity to the growing fear of target company collapses as a result of riskier financing at the next economic downturn. As far as activity is concerned, the authors project only a short time-out for private equity in the wake of the ongoing credit crisis. The majority of German buyouts are middle market transactions which are fairly unaffected by the crisis and continue to offer great hidden potential. Investor returns are likely to fall in the short and midterm due to higher interest rates and risk premiums but more restrictive financing, in turn, will also lower entry prices. If private equity groups can outbid strategic players at moderate levels going forward, returns should continue to be attractive. --

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Bibliographic Info

Paper provided by Frankfurt School of Finance and Management in its series Frankfurt School - Working Paper Series with number 89.

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Date of creation: 2008
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Handle: RePEc:zbw:fsfmwp:89

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Related research

Keywords: Private equity; buyout; LBO; MBO; financial sponsor; leverage finance; M&A; merger; acquisition; locust debate; credit crisis; sup-prime; middle market;

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Cited by:
  1. Heidorn, Thomas & Kahlert, Dennis, 2010. "Implied correlations of iTraxx tranches during the financial crisis," Frankfurt School - Working Paper Series 145, Frankfurt School of Finance and Management.
  2. Umber, Marc P. & Grote, Michael H. & Frey, Rainer, 2010. "Europe integrates less than you think: Evidence from the market for corporate control in Europe and the US," Frankfurt School - Working Paper Series 150, Frankfurt School of Finance and Management.
  3. Herrmann-Pillath, Carsten, 2011. "The evolutionary approach to entropy: Reconciling Georgescu-Roegen's natural philosophy with the maximum entropy framework," Ecological Economics, Elsevier, vol. 70(4), pages 606-616, February.
  4. Hankir, Yassin & Rauch, Christian & Umber, Marc P., 2009. "It's the market power, stupid! Stock return patterns in international bank M&A," Frankfurt School - Working Paper Series 129, Frankfurt School of Finance and Management.
  5. Bannier, Christina E., 2009. "Is there a hold-up benefit in heterogeneous multiple bank financing?," Frankfurt School - Working Paper Series 117, Frankfurt School of Finance and Management.
  6. Kostka, Genia & Zhou, Jianghua, 2010. "Chinese firms entering China's low-income market: Gaining competitive advantage by partnering governments," Frankfurt School - Working Paper Series 147, Frankfurt School of Finance and Management.
  7. Heidorn, Thomas & Winker, Michael & Löw, Christian, 2010. "Funktionsweise und Replikationstil europäischer Exchange Traded Funds auf Aktienindices," Frankfurt School - Working Paper Series 139, Frankfurt School of Finance and Management.
  8. Herrmann-Pillath, Carsten, 2010. "Rethinking evolution, entropy and economics: A triadic conceptual framework for the maximum entropy principle as applied to the growth of knowledge," Frankfurt School - Working Paper Series 146, Frankfurt School of Finance and Management.
  9. Herrmann-Pillath, Carsten, 2009. "A neurolinguistic approach to performativity in economics," Frankfurt School - Working Paper Series 123, Frankfurt School of Finance and Management.
  10. Kostka, Genia & Hobbs, William, 2010. "Embedded interests and the managerial local state: methanol fuel-switching in China," Frankfurt School - Working Paper Series 152, Frankfurt School of Finance and Management.
  11. Heidorn, Thomas & Kaiser, Dieter G. & Voinea, Andre, 2010. "The value-added of investable hedge fund indices," Frankfurt School - Working Paper Series 141, Frankfurt School of Finance and Management.
  12. Wystup, Uwe, 2008. "Vanna-volga pricing," CPQF Working Paper Series 11, Frankfurt School of Finance and Management, Centre for Practical Quantitative Finance (CPQF).
  13. Almer, Thomas & Heidorn, Thomas & Schmaltz, Christian, 2008. "The dynamics of short- and long-term CDS-spreads of banks," Frankfurt School - Working Paper Series 95, Frankfurt School of Finance and Management.
  14. Schalast, Christoph & Barten, Benita, 2008. "Private Equity und Familienunternehmen: eine Untersuchung unter besonderer Berücksichtigung deutscher Maschinen- und Anlagenbauunternehmen," Frankfurt School - Working Paper Series 107, Frankfurt School of Finance and Management.
  15. Heimer, Thomas & Hölscher, Luise & Werner, Matthias Ralf, 2008. "Access to finance and venture capital for industrial SMEs," Frankfurt School - Working Paper Series 97, Frankfurt School of Finance and Management.

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