INTEGRATED BUSINESS MODEL
Deutsche Beteiligungs AG creates value for its shareholders by way of two business lines – providing investment services to funds and investing along-side these funds.
The DBAG funds we initiate are the link between both business lines. They pool the assets of institutional investors and make investments in Mittelstand companies. We advise the funds in selecting, developing and, ultimately, divesting their portfolio companies or their interest. Employing the capital our shareholders have entrusted to us, DBAG invests as a co-investor alongside the DBAG funds.
Both business lines contribute to increasing the value of DBAG. In Fund Investment Services, assets under management or advisement and earnings are targeted for long-term growth. The objective we pursue in the Private Equity Investments business line is to sustainably build the portfolio companies’ value.
FUND INVESTMENT SERVICES
The advisory services provided to the funds can be split into three material processes:
- First, we identify and assess transaction opportunities (“invest”);
- second, we support the portfolio companies’ development process (“develop”),
- before thirdly, we realise the value appreciation (“realise”) upon a portfolio company’s well-timed and well-structured disinvestment.
As is customary in the industry, DBAG receives volume-related fees for these investment services, which constitute a continual and readily forecastable source of income.
PRIVATE EQUITY INVESTMENTS
The Private Equity Investments business segment largely encompasses investments which are held through investment entity subsidiaries. DBAG co-invests via these companies on the same terms, in the same companies and in the same instruments as the DBAG funds. To that end, DBAG has concluded co-investment agreements with the DBAG funds that provide for a fixed investment ratio for the lifetime of a fund. These agreed ratios also apply upon an investment’s disposal. Income is generated from the value appreciation and sale of these investments.
In addition, DBAG decided in the last financial year to include investments purely from its own balance sheet (in other words, not alongside the funds) as an additional investment programme (“Principal Investments”). These will include investments that are not consistent with the investment strategies of the existing DBAG funds; this applies, for example, to longer-dated minority investments.