More capital for investment companies

Private equity funds are benefiting from the low interest rate environment and are receiving massive amounts of money from institutional investors, as a new BVK balance sheet shows.

The German Private Equity and Venture Capital Association (BVK) has presented its half-year results. According to the report, around 6.6 billion euros flowed into the investment companies in the first six months, slightly more than in the same period last year.

Although most of the money still flows into medium-sized companies in which the private equity companies hold shares, start-ups are becoming increasingly important. Of the 627 companies in which private equity recently invested money, 376 were start-ups that raised venture capital in this way. "Venture capital is currently booming and the mood is great. Covid-19 is no longer a burden," says Ulrike Hinrichs, Managing Director of BVK.

According to the report, companies invested 2.25 billion euros in young companies, more than ever before. After just six months, this figure exceeds all venture capital efforts by private equity firms in 2020. The sometimes gigantic financing rounds by Celonis, Trade Republic and Wefox in particular are likely to be responsible for this development.