(Bloomberg) -- A record number of investment managers are chasing private asset deals in Germany, Austria and Switzerland, seeking to take advantage of generational change in the small and medium-sized businesses that are the backbone of the region’s economy.
The number of firms targeting private assets in the area rose 19% so far this year, according to a report released by Preqin on Wednesday. The figure includes general partners in private equity, debt, real estate, infrastructure and natural resources funds in the three countries.
The region “will remain a key territory for the growth of the industry” as many family-run businesses known as Mittelstand are set to be passed on to the next generation, Preqin said in the report.
The surge in investor interest contrasts with a slowdown in deal values as higher interest rates make debt-fueled buyouts less attractive and weigh on transactions. The value of private funds’ investments in the region has slumped more than 70% from €42 billion ($45.8 billion) in 2020, according to the report. Investments sold plummeted by more than 40% since peaking at €27.5 billion ($29.9 billion) in 2021.
“Those years were exceptional years, so we are more back to business as usual now,” said David Dawkins, lead author of the report. He said dealmaking should rebound in the years to come with funds currently holding high amounts of uninvested money.
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