Succession as a deal-flow engine: 186,000 successions by 2030

The generational change in the German Mittelstand will reach a preliminary peak in the coming years. For private equity, this creates both structurally growing, largely business-cycle-independent deal flow and an entrepreneurial task: designing succession solutions in such a way that the handover becomes a step change in investment and growth.

According to the latest estimate by IfM Bonn, around 186,000 companies are due to be handed over between 2026 and 2030. This is a persistently high level that reflects Germany’s demographic structure. For the Mittelstand, the KfW Succession Monitor puts the number of planned business successions at around 109,000 per year up to the end of 2029; more than one in two business owners is aged 55 or over.

What is new is that, according to KfW, if succession is secured when a handover is due in the near term, this leads to an average 40 per cent increase in investment by the company. Conversely, investment volume falls noticeably when succession remains unresolved. The question of succession therefore determines not only whether a company will continue to exist, but also directly its investment and innovation capacity. This gives financial investors a role that goes beyond the mere provision of capital. External succession solutions are becoming more important because intra-family handovers are less often successful. Investment companies can act as partners to the Mittelstand: they secure business succession, professionalise structures and management, and thereby create the conditions for investing in capacity, digitalisation and market access.

Financial investors do not enter succession situations as buyers of last resort, but as partners for the next stage of development. For business owners, a succession arranged at an early stage and on a professional basis safeguards the fruits of a lifetime’s work while also providing the starting point for new growth.