Deutsche Beteiligungs - Recession in Germany unfolding

Deutsche Beteiligungs (DBAG) posted a c 13% NAV decline in total return terms in FY22 (to end-September 2022), affected by lower public equity multiples used in the valuation and macroeconomic headwinds in Germany. In light of its high investment activity in FY22 (€176.8m, skewed towards IT services and software) and faltering private equity exits globally, management has proposed a lower dividend (to preserve capital for new and follow-on investments) of €0.80/share (vs €1.60 paid from FY21 profit), but reaffirmed its mid-term dividend planning of at least €1.60 pa. DBAG now trades at a 17% discount to NAV (versus a five-year average premium of 10%).