The first half of 2018 was successful in the private equity segment. However, political uncertainties – such as trading-conflicts with the US – are potential risks. Nevertheless the outlook for the second half of the year remains positive.

Overall the private equity deal activity in the German speaking region stayed strong with 98 closed deals in the first six months of 2018. In comparison in the first half of 2017 a total number of 94 deals were closed. The positive development continued in the second quarter of 2018 – with 118 deals being closed or currently in the M&A process. Considering industries, the highest deal activity has been reported in the industrial sectors of Engineered Products, Consumer Goods and Healthcare. By contrast, the deal activity reached a low level in the areas of Transportation and Energy, which mirrors increasing challenges within those segments. Leading economists predict a positive development in 2018.

From a political perspective, uncertainty still prevails for the private equity sector. Conflict between the US and North Korea has decreased since the Singapore summit in June, 2018. Yet the risk of trade wars is increasing – with regard to tolls on steel in the US, tolls on selected US products in the EU or China demanding tolls for agricultural products from the US. In Germany the dispute between chancellor Angela Merkel and the minister of internal affairs Horst Seehofer on the topic of refugees has put the coalition of the governing parties under pressure. Furthermore, the newly elected Italian government has announced that it will reposition itself with regard to the previously decided austerity program, which makes negotiations between EU members more difficult.

The Private Equity Newsletter offers an overview on deal-flows and is published on a regular base. The most important developments in private equity are considered in the context of relevant political events