How do key factors interact to influence private equity fundraising in the DACH region?

  • Lorenz Weihe (Student)

Student thesis: Master's Thesis

Abstract

The Private Equity industry has historically experienced a "golden age of Private Equity", consistently breaking global fundraising records. Low cost of capital and significant economic growth provided enabled Private Equity to outperform other asset classes. Recent shifts in the economic environment haltered fundraising and implied a necessary transformation for future growth. Research has already identified key factors in a global context. However, it lags in examining organizational resources and capabilities and its implications on overall fundraising. Hence, this thesis aims to investigate the key factors driving the decline in PE fundraising in the DACH region and to close the research gap by identifying most influential external and internal factors in the current fundraising climate. With triangulation, comprising exploratory expert interviews and existing literature, key factors were identified and evaluated on their potential to influence leveraged buyout fundraising. Findings of the study suggest that interest rates and market uncertainty constitute main external factors, negatively impacting fundraising. Organizational drivers and a more cautious, but resilient approach of investors mitigate negative external effects. Fund managers quickly adapted to transforming industry, emphasizing on value creation, stability, and a distinct investment strategy. The analysis also revealed areas for manuveur, potentially improving current fundraising efforts. Sector specialization, wider investor outreach, deal-by-deal structures, and the support of placement agents should be leveraged. Embracing and adapting to the industry transformation is paramount for fund managers’ survival.
Date of Award18 Oct 2024
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorPeter V. Rajsingh (Supervisor)

Keywords

  • Private equity
  • Leveraged buyout
  • Fundraising dynamics
  • Key factors
  • Transformation

Designation

  • Mestrado em Gestão e Administração de Empresas (mestrado internacional)

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