(Bloomberg) -- KKR & Co. says dealmaking has picked up and investors may be wrong to be so downbeat on Germany.
After a lull that started in 2022 and stretched into the middle of this year, “we have experienced a significant up-tick,” Philipp Freise, co-head of European private equity, said in an interview with Bloomberg TV. “People are negative on Germany right now. I would be a bit more positive.”
Dealmakers have seen a drought of transactions as higher interest rates made takeovers more expensive and economies such as Germany contended with fallout from Russia’s invasion of Ukraine. Yet the resulting challenges also present an investment opportunity as companies seek capital and “more active” investors, Freise said.
“People wouldn’t invest in Germany if there wasn’t opportunity,” Freise told Bloomberg’s Francine Lacqua. He cited the examples of Commerzbank AG, in which UniCredit SpA has taken a stake, and Covestro AG, which is being acquired by Abu Dhabi National Oil Co.
Speaking on the sidelines of the Berlin Global Dialogue, Freise said Germany is working on its energy transition. “It still has all the advantages, but it’s much more open to change now,” he said.
Still, Freise said the market for selling shares in companies to the public is “still shut, pretty much. There’s some timid attempts now for companies to go public, but not at the scale we’re used to.”
As a result, firms are trying to find other ways to return capital to investors, such as longer-term hold periods, the sale of minority stakes and the return of strategic buyers, he said. Activity is likely to pick up further in 2025 when several elections will have taken place, he added.
Separately, Freise said that “private credit is a significant opportunity in Germany. It’s definitely helping German companies or European companies to finance themselves in a more sustainable way, being more independent of the banking market.”
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