FFinancial investors are out of step – at least in terms of time. Normally, the elite of the investment industry travel to Berlin at the end of February to discuss their opportunities and needs. The corona pandemic has disrupted the cycle: Last year, the leading conference “Superreturn” took place in November after being postponed three times. In order to keep time, the organizers are turning it into a summer conference this year: It starts on Tuesday. In the coming year they will return to the usual time window. The 2023 conference will run from February 28 to March 3, as the organizer announced when asked by the FAZ. “Back to normal” is the date.
A lot of other things are not normal in the meantime. The investment managers had done surprisingly well as a result of the Corona crisis – as had the other players involved in mergers and acquisitions (M&A). Globally, the M&A volume reached a record high. Now the business is burdened – by the Ukraine war and several factors that it entails. In particular, inflation is amplified by drastically higher prices for energy and raw materials. The total M&A volume is around a fifth below the same period of the previous year – whereby the base effect must be taken into account, after all 2021 brought a high.
Private equity is proving to be a crucial and so far stable pillar: Marcus Schenck, Head of Investment Banking at Lazard in Germany, Austria and Switzerland, lists “financial investors who are still sitting on a lot of invested capital and are looking for opportunities” as a key M&A driver on. Not only do investors have trillions of dollars in pledges; their reason for existence is nothing other than trading with companies – while industrial groups can sit out an uncertain period with division sales. “People are doomed to do business,” says Burc Hesse, Germany head of the law firm Latham & Watkins and private equity specialist.
“We see an incredibly good pipeline”
“The core business of private equity is buying and selling,” says Jürgen Schlangenotto, managing director of the consulting boutique Peryton. Private equity has been a mainstay of mergers and acquisitions since the 2000s, while M&A collapsed after the dot-com bubble burst around the turn of the millennium. “The cyclicality back then – when private equity wasn’t such a big part of M&A volume – was much higher.” According to calculations by JP Morgan, private equity contributed a quarter of M&A volume in the period from 2010 to 2020, and around one in 2021 One-third.
Apart from the horror of the war in the East, there have so far been few concrete business consequences to be heard from individual investment companies. “We don’t have any transactions that are on hold, but all transactions that we are dealing with are currently ongoing,” says Advent’s Managing Partner and Head of Germany, Ranjan Sen Lack of interest: Two and a half weeks ago, she announced the closing of a new $25 billion fund — thought to be the second-largest fund in the world, behind a 2019 pot of competitor Blackstone.
“We see an incredibly good pipeline,” reports Johannes Laumann, board member of the Munich investment company Mutares, about the stock of takeover candidates. “The war of aggression in the Ukraine has only had an insignificant effect on the portfolio and in isolated cases,” summarizes the medium-sized private equity house Hannover Finanz on the situation in its own portfolio: “The portfolio companies are only involved to a limited extent or not at all connected to the Ukrainian markets.”