More capital for investment companies

Private equity funds are benefiting from the low interest rate environment and are getting a lot 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-yearly balance sheet. According to this, around 6.6 billion euros flowed into the investment companies in the first six months, a little more than in the comparable period last year.

Although most of the money is still flowing into medium-sized companies in which the private equity companies hold shares, start-ups are becoming increasingly important. Of the 627 companies that private equity put money into recently, 376 were startups that raised venture capital this way. "Venture capital is booming at the moment and sentiment is at its best. Covid-19 is no longer a burden," says Ulrike Hinrichs, managing board member of BVK.

According to the report, companies invested 2.25 billion euros in the still young companies, more than ever before. The figure already exceeds all venture capital efforts of private equity firms from 2020 after six months. Especially the partly gigantic financing rounds of Celonis, Trade Republic or Wefox are likely responsible for this development.