Deutsche Beteiligungs (ETR:DBAN) reported a busy but “unsatisfying” first half, citing a sharp decline in valuation multiples that outweighed positive operating performance across its portfolio. The private equity investor signed seven transactions during the period, including three acquisitions and four exits, while lowering its outlook for net asset value per share.
The company said it returned €26 million to shareholders through dividends and share buybacks, equivalent to roughly €1.50 per share. However, net asset value per share fell to €33.65 from €36, with total NAV standing at €580 million. Group income for the first half was negative €34 million, or nearly negative €2 per share.
Portfolio valuations outweighed earnings growth
Still, falling market multiples substantially affected portfolio valuations. The company highlighted a 33% decline in its software and IT-services peer group multiples, describing that segment as a distinct negative outlier. Industrial technology valuations, including those relevant to congatec, also weighed on results.
Management said it would focus on improving sales and earnings at portfolio companies rather than attempting to forecast market-multiple movements. It noted that multiples had declined significantly, though it was too early to determine whether they had stabilized.
The IT services and software segment represented 28% of the portfolio following the Solvares Continuation Fund top-up and the investment in mageba. Deutsche Beteiligungs said it does not intend to increase exposure to the sector through new transactions at present, although continued strong earnings growth could push the allocation above 30% if valuation multiples stabilize.
New investments and planned exits
Of the three acquisitions completed during the period, two were bilateral transactions. Management said bilateral processes may not necessarily result in lower purchase prices, but can allow for more thorough due diligence and a better transaction process.
The company made a €7 million long-term investment in Bug Bounty, a profitable Swiss provider of penetration testing and ethical hacking services. Deutsche Beteiligungs described the investment as a Series B financing in a profitable growth company and said Bug Bounty serves clients including Switzerland’s National Cyber Security Centre and banks. Management also sees potential cross-selling and other benefits across its portfolio of 37 companies.
Through DBAG ECF IV, the company invested in TNL Group, a planning platform serving energy and rail infrastructure projects. TNL supports work such as environmental studies required for permits for energy lines and railway tracks. Deutsche Beteiligungs said the business operates in a defensive, growing and fragmented market, offering opportunities for organic growth and buy-and-build activity. The bilateral primary transaction was signed in May 2026.
Management said the top five portfolio holdings account for 35% of the portfolio. It characterized this concentration as temporary, reflecting strong growth among certain investments. Cartonplast is currently being marketed for sale, while freiheit.com may be considered for an exit later this year. Management said congatec and duagon appear to be potential exit candidates for 2027, although it remains early to make definitive timing decisions.
The company said it had already completed disposals involving duagon and Kraft & Bauer. It added that Cartonplast and freiheit.com have been valued cautiously amid the difficult exit environment, though it does not expect large valuation write-ups comparable with duagon if those businesses are sold this year.
Fund services outlook improves as assets under management rise
Assets under management increased to €2.9 billion, supported by the Solvares Continuation Fund. The company said the increase was not yet fully reflected in earnings from Fund Investment Services because first-half results were affected by placement and setup fees related to that fund.
Those fees are not expected to recur in the second half. Combined with cost controls and growing assets under management, this prompted Deutsche Beteiligungs to raise its guidance for EBITA from Fund Investment Services to €9 million to €11 million, from previous guidance of €5 million to €9 million.
Guidance lowered for NAV per share
Despite the higher Fund Investment Services outlook, the company reduced its NAV-per-share guidance to a range of €32 to €36 from its previous forecast of €36 to €40. Management described the revised outlook as a response to a difficult first half and said maintaining the prior guidance would no longer be prudent.
The company said it remains financially well positioned following disposals and will continue seeking investment opportunities in what it described as a complicated but attractive environment. Management emphasized that it intends to maintain a diversified portfolio, continue improving earnings at portfolio companies and pursue investments it believes can be accretive over time.
About Deutsche Beteiligungs (ETR:DBAN)
Deutsche Beteiligungs AG is a private equity and venture capital firm specializing in direct and fund of fund investments. Within direct investments the firm specializes in expansion capital, management buyout, emerging growth, middle market, mid venture, late venture, growth capital, add-on acquisitions, bridge financing, PIPES, management buy-ins for experienced executives, corporate spin-offs, succession arrangements and generational transition in a family-owned business, small and medium-sized companies, and pre-IPO stage investments.
