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Stock Analysis & ValuationDeutsche Beteiligungs AG (0QF7.L)

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Previous Close
£25.63
Sector Valuation Confidence Level
High
Valuation methodValue, £Upside, %
Artificial intelligence (AI)31.6023
Intrinsic value (DCF)18.95-26
Graham-Dodd Method30.4019
Graham Formulan/a

Strategic Investment Analysis

Company Overview

Deutsche Beteiligungs AG (DBAG) is a leading German private equity and venture capital firm specializing in direct investments and fund-of-fund strategies. Founded in 1965 and headquartered in Frankfurt, DBAG focuses on mid-market companies in Europe, particularly the DACH region (Germany, Austria, Switzerland) and Northern Italy, as well as selective opportunities in the U.S. The firm targets investments ranging from €10 million to €235 million in sectors such as industrials, technology, healthcare, and consumer discretionary. DBAG provides growth capital, buyout financing, and succession solutions, often taking majority or minority stakes in businesses with revenues between €55 million and €700 million. With a diversified portfolio and a long-term investment horizon, DBAG leverages its deep regional expertise and sector knowledge to drive value creation. As a publicly listed private equity firm on the London Stock Exchange, DBAG offers investors unique exposure to European middle-market private equity opportunities.

Investment Summary

Deutsche Beteiligungs AG presents an interesting proposition for investors seeking exposure to European mid-market private equity through a liquid public vehicle. The firm's focus on the economically robust DACH region provides stability, while its sector diversification mitigates concentration risk. With a market cap of €400 million, no debt, and a dividend yield of approximately 2.5% (based on €1 dividend per share), DBAG offers income potential alongside capital appreciation. However, the firm's performance is closely tied to private market valuations and exit environments, introducing cyclicality. The 0.997 beta suggests market-correlated volatility. Recent financials show strong net income (€47.5 million) and positive operating cash flow (€13 million), but the relatively small scale compared to global peers may limit deal flow in competitive situations.

Competitive Analysis

Deutsche Beteiligungs AG competes in the crowded European mid-market private equity space by leveraging several distinct advantages. Its 50+ year track record provides unmatched local market knowledge and deal sourcing networks in the DACH region, where many family-owned businesses prefer regional investors for succession deals. The firm's public listing provides permanent capital—a rarity among peers—allowing for flexible investment timing without fund lifecycle pressures. DBAG's dual strategy of direct investments and fund investments provides diversification, though this may dilute focus compared to pure-play firms. The firm's typical check size (€10-235 million) positions it between larger pan-European funds and smaller regional players, but it faces increasing competition from international firms moving downmarket. While DBAG's sector expertise in industrials and technology is strong, its relatively small team (versus global megafunds) may limit bandwidth for complex cross-border deals. The zero-debt balance sheet is conservative but could potentially be leveraged for larger opportunities.

Major Competitors

  • Capgemini SE (CAP.PA): While primarily an IT services firm, Capgemini's venture arm competes in tech investments. Stronger in digital transformation deals but lacks DBAG's industrial focus. Global reach but less specialized in German Mittelstand.
  • EQT AB (EQT.ST): Larger Nordic peer with pan-European presence. Stronger in healthcare and infrastructure but less focused on German mid-market. Higher AUM provides scale advantage but may overlook smaller deals DBAG targets.
  • Porsche Automobil Holding SE (PAH3.DE): German investment holding with automotive focus. Competes for industrial deals but lacks DBAG's diversified sector approach. Strong balance sheet but less active in venture/growth capital.
  • Thomson Reuters Corporation (TRI.N): Competes indirectly through venture arms in professional services tech. Global scale but no dedicated DACH presence. More focused on information businesses versus DBAG's industrial core.
  • Baring Private Equity Asia (BG.L): Asia-focused but expanding in Europe. Competes for tech/consumer deals. Stronger in growth equity but lacks DBAG's local networks and buyout expertise in German-speaking markets.
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