German Private Equity Barometer: Mixed sentiment on the investment market

Frankfurt (ots) -

- Slight decrease in optimism overall
- Mood of early stage investors deteriorates significantly
- Confidence in later phase segment rises modestly

The optimism on the German private equity market declined somewhat
in the second quarter of 2013. The German Private Equity Barometer
dropped by 3.7 points to close at 36.5 points. The business climate
index calculated by the BVK and KfW is thus now only slightly higher
than the long-term average (36.1 points). The significant decline in
sentiment among early stage investors pushed the indicator into
negative territory. In contrast, investors again expressed rather
more optimism in the later phase segment.

The mood of early stage investors cooled sharply in the second
quarter (-16.9 points) to 28.6 points. This figure is significantly
below the long-term average (37.7 points). Conversely, the mood of
later stage investors is more positive than in the previous quarter
(+5.4 points to 43.3 points). Falling demand for venture capital is
the main reason for the decline in sentiment in the early stage
segment. The optimism in the later stage segment can be attributed to
increased merger and acquisition activity.

The survey participants assessed both the fundraising situation
and exit possibilities as being far better than in the previous
quarter. That said, the recent negative assessments of start-up and
innovation activity are having a dampening effect on sentiment in the
private equity market. The diminishing confidence of early stage
investors is mainly reflected in the business expectations for the
coming six months (-6.1 points). In contrast, the current business
situation is only judged as being slightly worse (-1.2 points),
because here the negative assessments in the early stage segment are
offset by the business situation of later stage investors, which
remains good.

BVK Managing Director Ulrike Hinrichs commented on the mixed
sentiment in the private equity market: "The mood upswing in the late
stage is welcome and also very closely related to the robust economic
situation in Germany. The positive outlook gives reason to hope for a
successful second half of the year with a lively investment business.
The critical mood in the early stage segment should not hide the fact
that venture capital remains of key importance for innovation
financing. We are convinced that the German venture capital market
will regain its optimism. Politicians can also contribute to this by
finally establishing conditions enabling venture capital in this
country to play its role as a driving force, so that the potential of
young and innovative companies is used to boost the prosperity of our
country".

Dr Jörg Zeuner, Chief Economist of the KfW Group, is of two minds
about the development in the private equity market: "We have mixed
feelings about the current development of the market. The upward
trend in the later phase is certainly welcome, but the comparatively
sharp decline in the early stage segment is a warning signal that the
willingness to invest and innovate among companies is also suffering
under the uncertain conditions. It is becoming increasingly difficult
for venture capital investors".

KfW compiles the German Private Equity Barometer jointly with the
Bundesverband deutscher Kapitalgesellschaften e. V. (BVK)
exclusively for Handelsblatt. A comprehensive analysis is available
to download at www.kfw.de/gpeb.

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