The Bavarian Equity Company (BayBG) invested around 45 million euros in medium-sized enterprises and startups in Bavaria in fiscal year 2023/24. Compared to the previous year with an investment volume of around 75 million euros, this represents a significant decline. Nevertheless, an annual surplus of 9.4 million euros was achieved – a significant increase compared to the previous year’s result of 5.1 million euros.
According to Peter Pauli, managing director of BayBG, the investment level is a “solid result” given the current economic and geopolitical conditions. He explains:
“The structural crisis that Germany is currently facing is causing medium-sized enterprises to act very cautiously and to postpone larger investments. As a result, the demand for equity capital is declining.”
The medium-sized/growth business division was particularly affected, traditionally the strongest area of the equity company. Here, the investment volume fell from 43.7 million euros in the previous year to 22 million euros in the current fiscal year.
Succession, startups, and turnaround area remain stable
While engagement in the medium-sized sector declined, other areas remained relatively stable. Equity solutions in the context of business succession accounted for investments of 10.2 million euros. BayBG invested 7.6 million euros in venture capital in startups as well as young enterprises and business start-ups. A further 2.7 million euros went to small and young enterprises, and 2.5 million euros to enterprises in special situations as part of the turnaround area.
BayBG fell short of its planned new investments of 45 million euros compared to the planning target of 58 million euros for fiscal year 2023/24. Peter Herreiner, also managing director of BayBG, comments on this:
“More new business would have been easily possible in the past fiscal year, but we apply very strict standards to our investments in order to live up to our responsibility to entrepreneurs and business owners alike.”
BayBG looks to the future with optimism
The balance sheet volume of the Bavarian Equity Company grew in fiscal year 2023/24 to 453.5 million euros, and equity increased to 278.7 million euros (as of September 30, 2024). In total, BayBG holds stakes in 457 Bavarian companies with over 40,000 employees. Pauli looks optimistically to the future:
“Despite the currently tense situation, we see good reason to look to the future with confidence in the medium term. Bavaria is an economically and technologically strong region and continues to offer many entrepreneurial opportunities.”
Herreiner adds:
“In the medium term, fast-growing and innovative companies need equity capital to realize major development steps and implement them on a solidly financed basis. Medium-sized enterprises receive optimal offerings through our minority stakes and mezzanine capital to strengthen their equity base and realize growth.”
