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UK-based Botts & Company closes German office

Mid-market buy-out firm, Botts & Company, has announced the closure of its German office. Botts joins a growing number of private equity firms that are scaling back their operations in Germany.

Botts' withdrawal from the market has been made despite the firm's recent successful exit from its Yxlon investment. Bott's made a three-fold return on its initial investment in the industrial testing company when it was sold to InVision for E39m earlier this year.

Botts has closed its one-person representative office in Munich because it was uncomfortable with the country's economic situation, according to eFinancial News.

Alchemy Partners and Legal & General Ventures have both closed German offices in the last 12 months. 3i has shut its offices in Hamburg and Berlin, although it has retained other offices, principally Frankfurt. Duke Street Capital has delayed its plans to open a German office.

Until fairly recently, Germany was widely judged to be one of the great underexploited opportunities for private equity firms. The size of its economy and the wealth of competitive privately owned mid-sized companies were thought to promise a hugely fertile environment for buy-out players.

But the relentless deterioration of the country's macro-economy and the stuttering pace of economic reform have disabused all but the most optimistic investors and precipitated a steady retreat by overseas private equity specialists.

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