Every day counts - Deutsche Beteiligungs AG

EXPANSION FINANCING –
REACHING FOR COMMON GOALS
Deutsche Beteiligungs AG · Annual Report 2002/2003
Corporate Review – Investments Expansion financing
In the past, we have invested in minority holdings: we are
a partner to enterprises in reaching jointly defined growth
targets. In most cases, these enterprises are family-owned,
and the target is frequently an initial public offering. Currently,
however, this realization strategy is impaired, since
capital markets are not receptive for new issuances. Other
exit channels are difficult to access as a minority shareholder.
Ultimately, this is opposed to our goal of realizing value
appreciation through disinvestments, and expansion financing
investments will now only be made in exceptional
cases.
Our investment strategy has been adapted to changed market conditions. Regardless
of this change, Deutsche Beteiligungs AG is a strong, reliable partner to portfolio companies
in which it holds a minority interest en route to realizing their ambitious goals.
We give our portfolio companies the support they need in preparing for flotation. Other
companies classified in this business field may already have achieved a stock market listing.
This is frequently an initial key step toward an exit and the realization of the value
created.
In line with our strategy, the share of expansion financing investments in the portfolio
again declined in financial year 2002/2003. We assume that this trend will continue in
the coming years: our strategy is to invest at least 80 percent of our capital in management
buyouts in German-speaking countries. Valued at acquisition cost, expansion
financing investments accounted for 117.2 million euros, or 39.1 percent of the portfolio,
at October 31, 2003. Four relatively small holdings in this business field were disinvested
this reporting year, thereby raising the average size of expansion financing investments
from 6.64 million euros to 7.81 million euros.
Growth financing declines
43