General questions on private equity
What does the term private equity mean?
What is private equity?
What is a private equity fund?
A fund is a group of assets managed by an investment company. Distinctions are made between funds with regard to the strategy they pursue (growth or value strategy), their structure (closed or open funds) and the assets in which they invest (shares, bonds, property, etc.). The HANNOVER Finanz Group’s funds manage private equity investments in medium sized enterprises and, as so-called “evergreen funds”, have no fixed term.
What distinguishes private equity from other financing instruments?
What makes the German private equity market special?
Foreign funds have foreign investors, and the funds are mostly based in foreign tax havens. They are asset-managing limited partnerships, and are taxed on the shareholder level abroad. There is exit pressure from limited terms, and there are considerable legal requirements and restrictions imposed by the German Finance Ministry’s letter of 16 December 2003. Significant legal uncertainty is the result. As a rule, the transactions concern large companies and take place with the involvement of a large amount of borrowed capital. The German private equity sector, in contrast, draws its capital from domestic institutional investors (e.g. insurance companies). The funds, based at home, have the legal form of a company limited by shares (AG or GmbH). To protect the investors, they are fiscally non-transparent, and are exempted from trade tax by the German Act on Investment Companies (UBGG). As a rule, under the Tax Relief Act of 2002, they are also exempt from corporation tax. There is no limitation to the term, and the legal position is clear. The companies in the portfolio have the structure of medium sized enterprises, and the transactions performed for expansion or buy-out funding are notable for the large proportion of equity capital involved. The HANNOVER Finanz Group, as a German financial investor, concentrates on medium sized businesses and has a background as a recognized private equity partner to medium sized, owner-managed companies in Germany.
What has to be considered when deciding for private equity?
- The current shareholders wish to reduce their holdings in the company. In this case, an investment can be made in the company by its current management (management buy-out, MBO) or external managers who are familiar with the industry and have identified potential (management buy-in, MBI), together with a private equity partner.
- The company has potential for growth which cannot be exploited with the existing capital structure.
- The company is to be spun off from a larger group.
- The company lacks a competent financial partner who is entrepreneurially minded and has the same objectives.
Specific questions on the HANNOVER Finanz Group
What industries does HANNOVER Finanz invest in?
How many funds does the HANNOVER Finanz Group have?
- Commerz Unternehmensbeteiligungs AG
- WeHaCo Unternehmensbeteiligungs-GmbH
- HF-Fonds VII Unternehmensbeteiligungsgesellschaft mbH
- HF-Fonds IX Unternehmensbeteiligungsgesellschaft mbH
- HF-Fonds X Unternehmensbeteiligungsgesellschaft mbH
In which phases of corporate development is the investment made?
- MBO (Management Buy-Out)
- MBI (Management Buy-In)
- Preparation for IPO
What sets HANNOVER Finanz apart from other private equity companies?
Does the HANNOVER Finanz Group invest openly or as a silent partner?
How are arrangements made for the exit?
What say does HANNOVER Finanz have in the running of the business?
How long is the investment retained?
What references does the HANNOVER Finanz Group have?
List of former investments
How can I make contact with a project manager?
What is the history of the HANNOVER Finanz Group?
What is the basis of the HANNOVER Finanz Group’s success?
Where can I find the latest news on the HANNOVER Finanz Group?
Who is the contact for corporate communications, press and public relations?