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Valuations in German private equity market

Pricings in the German private equity market are currently “expensive”, but, overall, not yet “dangerously excessive”

Investment managers at more than 50 private equity firms operating in Germany, who are polled twice a year on behalf of Deutsche Beteiligungs AG believe that Pricings in the German private equity market are currently “expensive”, but, overall, not yet “dangerously excessive”

In some areas, however, the professionals interviewed see a risk of excessive valuations. In particular, the prices for medical engineering and technology companies are now so high that there is a threat of a bubble forming in these sectors. By contrast, trading firms are considered the least over-valued, along with automotive suppliers and mechanical and plant engineering companies. In the survey conducted at yearend 2016, only five percent of the investment managers interviewed stated that valuation levels were “normal when compared over the long term”; 86 percent termed prices as being “expensive”. Eight percent of the respondents even consider prices to be “dangerously excessive”.

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