Contact
Newsletter
Business model
DBAG’s business model, which is geared towards increasing value for its shareholders, rests on two pillars – Fund Investment Services and Private Markets Investments. The Funds provide a strong link between the two segments. Because the Funds are at the core of our business model, we refer to it as being integrated.
The Private Markets 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 Funds. To that end, DBAG has concluded co-investment agreements with the Funds that provide for a fixed investment ratio for the lifetime of a fund. These ratios also apply upon an investment’s disposal. Income is generated from the value appreciation and sale of these investments.
In addition, DBAG uses investment opportunities that exceed the terms of standard private equity funds (Long-Term Investments). DBAG makes these investments from its own resources, i.e. not as a co-investor alongside one of the Funds, which is its usual strategy. The approach also generally opens up the scope for other investment scenarios that are not consistent with the investment strategies pursued by the existing Funds.
The Fund Investment Services business line provides advisory services to the Funds. We steer this process with our own resources in tried-and-true workflows, primarily through the investment advisory team.
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 (“support”),
- 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.
Target system
Target system comprising financial and non-financial objectives
The core business objective of Deutsche Beteiligungs AG’s activity is: We aim to increase our Company’s value in the long term and have defined financial and non-financial objectives to achieve this. The latter comprise ESG aspects, i.e. environmental and social aspects of our business activities, as well as the principles of good corporate governance. It is consistent with the long-term nature of our business that we take responsibility for the impact that our decisions have on others, both now and in the future.
As is common in the private equity sector, a long period of time is required before DBAG can be judged on its success. This is why we see the term “sustainable” as meaning first and foremost “in the long term”. Key indicators can also be headed on a downward trajectory in the short term. To a certain extent, this is a typical feature of the business because, for example, income from Fund Services falls after investments are disposed of. This can also be attributed to external factors that can change significantly at short notice. For instance, this is the case with the valuation levels of listed peer group companies when we measure the fair value of our private equity investments on a quarterly basis.
Financial objectives:
- Increase the net asset value
- Build the value of the Fund Investment Services segment
Non-financial objectives:
- Reduce or avoid greenhouse gas emissions
- Improve employee satisfaction
- Prevent compliance breaches
Downloads
