The demand in Germany for private equity has remained high for more than ten years, but particularly in times of crisis, private equity companies’ activities are constantly under attack.
In numerous studies and publications – particularly in publications from private equity companies themselves – it is pointed out that investment companies have been supporting the technological and structural transformation of the German economy for decades by investing in fast-growing companies and industries.
It is often proclaimed that in this way a contribution was made to restructuring and modernising established industries and developing new economic sectors. By identifying sustainable companies and providing them with additional capital, they secure existing jobs and create new ones over the long term, the studies claim.
A central hypothesis can thus be formulated: PE-financed companies develop better than average, both as regards the number of employees and in terms of their financial indicators.
An empirical, quantitatively and qualitatively oriented study of the performance of private equity transactions in Germany show whether private equity transactions represent a promising possibility to further develop a company and act as a growth accelerator or not.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Turnover categories
- Expectation of return on equity
- Probability of new jobs
- Key performance indicators
- Conclusion for hypothesis
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study examines the impact of private equity (PE) investments on the performance of companies in Germany. It seeks to determine whether PE transactions act as growth accelerators, contributing to both increased employment and improved financial indicators.
- The role of PE in the German economy and its impact on company growth
- The investment strategies and target companies of PE firms
- The expected returns on equity for PE investments
- The relationship between PE investments and employment creation
- The key performance indicators used to evaluate the success of PE investments
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the study's background and research question, highlighting the significance of private equity in the German economy and the ongoing debate regarding its impact on companies. It establishes the central hypothesis that PE-financed companies perform better than average in terms of both employment and financial indicators.
- Turnover categories: This chapter analyzes the distribution of private equity investments across different turnover categories in German companies. It reveals that the most prominent category is small and mid-sized enterprises with annual turnovers between EUR 20-50 million, highlighting the specific focus of PE firms in this segment.
- Expectation of return on equity: This chapter explores the expected returns on equity for private equity investments. It presents data from surveys of private equity companies, revealing their high expectations for returns, with a significant proportion aiming for returns between 15-25% and even higher.
Schlüsselwörter (Keywords)
Private equity, growth accelerator, German economy, investment, return on equity, employment, key performance indicators, small and mid-sized enterprises, turnover categories.
- Quote paper
- Jörg Eschmann (Author), 2010, Private equity as growth accelerator, Munich, GRIN Verlag, https://www.grin.com/document/163272
