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Deutsche Beteiligungs reports Q1 profit; remains upbeat on German outlook

Germany's oldest private equity firm Deutsche Beteiligungs has announced a small profit for the first quarter of the year and signalled cautious optimism about the market.

A single exit propelled net income to E3.4m in the three months to the end of March, compared with a loss of E1.6m for the same period last year.

Wilken von Hodenberg, spokesman for the management board, told the annual meeting that the firm was well positioned for the year ahead. ‘In light of the quality of the portfolio, Deutsche Beteiligungs possesses a good platform on which to return to profitable operations…We can report that the majority of the companies in the portfolio improved their profitability in 2002,' he said.

The turnaround on the same period last year was thanks to the sale of the firm's investment in car parts manufacturer Edscha AG to the Carlyle Group.

The firm said in a statement that corporate restructurings would continue to provide a strong supply of deal flow but cautioned about the prospect for exits. ‘Opportunities to sell investments remain limited: the stock market is still not available as an exit channel, and strategic investors are exercising restraint in the momentary state of the market.'

A string of disillusioned investors have closed down their German operations over the last 12 months in recognition at the failure of the market to take off in line with expectations. Committed investors, however, maintain that Germany still promises a wealth of attractive opportunities to firms that understand its cultural idiosyncrasies.

Deutsche Beteiligungs is a listed company. Its track record stretches out over 38 years. It focuses on what it considers to be well positioned, profitable and growth-prone subsidiaries and mid-sized enterprises in Germany, elsewhere in Europe and the US.

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