One calls participation capital investments, with which holding companies acquire portions of enterprises and itself thereby in their value and take part success. Differently than outside capital, speak loans, does not have participation capital not to be paid back. A holding company makes money if the portions, which were acquired, can be further-sold at a higher price.

Beside very many private, profit-oriented holding companies act also some in a public order, like for example the holding companies of the Lands of the Federal Republic or the so-called medium-size holding companies.

In this strongly by America and England coined/shaped industry two key words are used, which different products, markets and customer groups to differentiate. One speaks of venture Capital and private Equity.

Private Equity

So-called private Equity societies acquire usually majority portions or qualified minorities at enterprises, which gain profits. Qualified minorities contain comprehensive right of veto and say.

Private Equity societies acquires enterprises (- santeile) with own capital funds and outside capital (bankers' loan). By the future feedback of the loans from the Unternehmensgewinnen one expects finally the acquisition of the enterprise only by the own capital funds portion. One speaks therefore also of Leverage effect (=Hebel) of own capital funds by a portion outside capital.

The portion from own capital funds to outside capital depends on the free means of the enterprise future for the operation of interest and repayment. As rough direction 40% own capital funds can serve for 60% outside capital. In the year 2005 one speaks covered of grasshoppers, which begin up to over 90% outside capital to acquisition of the portions. Around this load to serve an enterprise must save very strongly, usually at personnel and at research and development. The consequences from it can be dramatic for the future of the enterprise. However an adjusting effect occurs, since a private Equity society makes only money, if the enterprise can be sold at a higher price than to that it were acquired. Thus if an enterprise is completely scooped out, it might be difficult this to sell.

Venture Capital

Venture Capital societies are a special form of the holding company, whom in principle at enterprises in an early enterprise phase and frequently still no profits are or cash-flow gain.

It concerns thereby a risk capital. A venture Capital society takes part in a growth oriented enterprise with high yield chances. The risk, which is received the venture Capital society thereby, is high.

The height of the participation amounts to frequently under 50 per cent, therefore it concerns a minority participation however with appropriate control and say.

The venture Capital giver expects itself apart from a profit-sharing above all also an increase in value of its business share, which he would like to sell after five to seven years. After that victories of the stock exchange as sales way in the year 2000 the most frequent way is in the foreseeable future still the sales to a industriellen partner, the so-called trade Sale.

Venture Capital must not be paid back, decreases/goes back however in case of success over the sales of the portions with profit to the investors.

External one left

• Web page of the Federal association of German equity investment companies

Articles in category "Participation capital"

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