DBAG Closes Oversubscribed Seventh PE Fund at €1B

Jul 28 2016 | 10:56pm ET

German private equity company Deutsche Beteiligungs AG, better known as DBAG, has raised €1 billion in capital commitments for its seventh buyout fund. 

The new vehicle, named DBAG Fund VII, significantly exceeded the size of its predecessor fund, which closed in 2012 with commitments of €700 million, according to the company. Raised in less than a quarter year in a receptive environment, DBAG invested €200 million into the fund itself.

About 80% of commitments came from investors in preceding funds, the company said, with pension funds, funds of funds, and insurance companies accounting for the majority of the capital.

DBAG Fund VII consists of two sub-funds: an €800 million principal fund, of which €183 million come from DBAG for its co-investment, and a supplementary €200 million top-up fund, to which DBAG committed €17 million. The supplementary fund will be used for larger transactions, which can be up to €200 million apiece. 

The fund will typically invest in companies with an enterprise value of between €75 and €250 million, a segment that consists of companies which generate revenues of between €50 and €500 million. 

The new launch represents a strategic advancement for DBAG, since its structure allows investments of up to €200 million in a single larger buyout, the company said, as well as smaller, more flexible financings in owner-managed German “mittelstand” companies. The investment period is expected to begin in 2017.

“We see DBAG as a platform for all types of equity solutions for Germany’s Mittelstand,” said Torsten Grede, spokesman of DBAG’s board of management, in a statement. “With the option of investing equity of up to €200 million in a portfolio company, we will also be able to engage with larger mid-market companies. This complements our offering and further strengthens DBAG’s market position.”

Founded in 1965 and among the first private equity companies in Germany, Frankfurt-based DBAG has assets under management or advice of nearly €2 billion, inclusive of the new fund.

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