Every day counts - Deutsche Beteiligungs AG

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IV. 2. Result of the revaluation of portfolio investments
The objective in the private equity business is to achieve capital gains through the
realization of investments from the portfolio. Our strategy is to sustainably build the value
of our investments. Nevertheless, general economic or business developments in certain
portfolio companies may necessitate performing valuation adjustments or write-offs.
These are always based on an assessment of the longer-term value of an investment.
The net amount from the revaluation of investments totaling –10.0 million euros was
clearly less than the previous year’s unusually high level, which necessitated write-downs
of 27.0 million euros. At 18.9 million euros, the level of valuation adjustments required
to be performed on individual investments was again high in the reporting year. However,
four investments whose value had previously been depreciated have returned to a pattern
of good progress, thereby enabling an appreciation on their valuation totaling 6.8 million
euros. The net amount from these value movements represents a marked improvement
of 63 percent compared with the prior year.
IV. 3. Result from investment management
Income from investment management activity netted against expenses for canvassing
new transactions and the management of the portfolio amounted to –4.1 million euros,
thereby representing a distinct improvement of 4.1 million euros against last year’s total
of –8.2 million euros. This increase largely stems from management fee income from
the new DBAG Fund IV co-investment fund earned this year for the first time. Similar to
the previous year, income from fees paid for the structuring of transactions amounted
to 2.3 million euros. Income from fees for the management of co-investment funds rose
to 7.9 million euros. Contained in this sum is a one-off item of 0.8 million euros which
will not be applicable in the following financial years. Moreover, management fee income
declines as funds disinvest; thus, this year’s level of fee income should not be considered
a constant for the following years. At 7.6 million euros, personnel costs largely remained
unchanged. Fees paid for the placement of the new parallel fund amounted to 2.1 million
euros, following 1.5 million euros the prior year.
IV. 4. Net income for the year
Pursuant to last year’s consolidated net loss – the first in the Company’s history –
totaling –15.8 million euros, this year saw a return to a positive result, with consolidated
net income at 3.1 million euros. This advance of 18.9 million euros over the year before
is largely due to the valuation of portfolio investments, which clearly improved.
The return on equity, measured by the net income for the year in relation to the
opening equity at the beginning of the financial year, was 2.0 percent. At –9.2 percent,
the return was worse than last year as a result of the net loss.