Many small and medium-sized busi­nesses were forced over­night by the COVID-19 pande­mic to adopt new, digi­tal ways to reach their custo­mers — with success. The oppor­tu­ni­ties asso­cia­ted with this are being seized, and the digi­tiza­tion wave is rolling. Howe­ver, there is often a lack of exper­tise and resour­ces to formu­late a suita­ble digi­tal stra­tegy and imple­ment it. Here, digi­tally expe­ri­en­ced, well-capi­­ta­­li­­zed private equity compa­nies are taking on a new, strong role; they bring exper­tise in digi­tiza­tion topics in various indus­tries, which makes them even more attrac­tive as investors.

ESG, SDG, sustainable or impact inves­t­ing are the new buzzwords in the finan­cial indus­try. No company — even those outside the finan­cial sector — will be able to get by without addres­sing ESG. The aim is to exclude certain nega­tive effects when inves­t­ing by means of a check­list and to moni­tor certain sustaina­bi­lity risks in risk manage­ment. Impact inves­t­ing will conti­nue to gain momen­tum, although ESG regu­la­ti­ons will require entre­pre­neurs to provide social and environmental
respon­si­bi­lity, which requi­res a signi­fi­cant invest­ment of time and person­nel. Bloom­berg analysts predict that as early as 2025, one in three dollars will go into sustainable invest­ments. Howe­ver, the eco-trap lurks in the fine print. Often, the crite­ria for sustaina­bi­lity are so vaguely formu­la­ted that even suppo­sed eco-funds hardly differ from conven­tio­nal ones.

SPACs (Special Purpose Acqui­si­tion Compa­nies) have become very popu­lar as inves­tors. If their growth pros­pects are good enough, fast-growing young compa­nies can merge with a SPAC and go public. In 2020, some 250 SPACs with a total value of $79 billion were listed on the U.S. stock market; in Janu­ary 2021, their value increased by $40 billion. Euro­pean inves­tors are still reluc­tant here: there are only 3 SPACs so far. The foun­der of LAKESTAR, Klaus Hommels, has taken one of them (275 million euros) public.

The mergers and acqui­si­ti­ons (M&A) busi­ness has reco­vered spec­ta­cu­larly since the Corona pande­mic and is heading for a new record year, both in the USA and in Europe. Invest­ment banks expect the golden days to last. Not least because finan­cial inves­tors conti­nue to be very active — they are sitting on huge amounts that need to be inves­ted — and central bank key inte­rest rates remain low. The favorable finan­cing makes many deals possi­ble in the first place.

Twelve promi­nent authors offer you ten exci­ting and cutting-edge topics from the private equity, corpo­rate finance, SPAC and block­chain indus­tries in the maga­zine section at the front of FYB 2022:

Digi­tiza­tion poses major chal­lenges for many medium-sized compa­nies. It is often diffi­cult to find the right approach and the right consul­tants. Andi Klein (Triton Part­ners) explains the best stra­tegy for inves­t­ing in the digi­tal future. — Dr. Stefan Sambol (OMMAX) has advi­sed on nume­rous digi­tiza­tion proces­ses and explains why he and his part­ners have iden­ti­fied private equity funds as real drivers of digi­tiza­tion for medium-sized compa­nies in Europe. — How the use of Digi­tal Ledger Tech­no­logy (DLT) will change the asset manage­ment sector inclu­ding risk manage­ment is presen­ted in detail by Frank Dorns­ei­fer (BAI) in his paper on toke­niza­tion — the trans­fer of assets into the digi­tal dimen­sion — using block­chain technology.

This year, for the thir­te­enth time in a row, Chris­toph Ludwig and Thomas Unger (BLL Braun Leber­fin­ger Ludwig Unger) have writ­ten an inte­res­t­ing article on a tax compli­ance topic in the FYB Finan­cial Year­book. In doing so, they find that in some fiscal subject areas “nothing flows anymore” (a depar­ture, so to speak, from πάντα ῥεῖ — ever­y­thing flows), and in other subject areas the direc­tion of flow is incor­rect (πάντα ῥεῖ — ever­y­thing flows, but just in the wrong direc­tion). We thank the authors!

Impact inves­t­ing is on the rise! In the DACH region alone, sustain­ably mana­ged capi­tal is expec­ted to increase almost five­fold over the next 3 years to around €3.8 tril­lion. On the adver­ti­sing pages of main­stream invest­ment publi­ca­ti­ons, there is almost no product left that does not adver­tise ESG, SDG, Sustainable or Impact. Gerhard Schwartz (Wi Venture) and Mauritz von Einem (ARQIS) take a closer look at the various terms and how they work in the market. Not ever­y­thing has Impact in it just because it says Impact on it. — Venture capi­ta­lists inves­t­ing in green tech start­ups are Tobias Seikel and Lena Thiede (Planet A). They elabo­rate on why sustaina­bi­lity offers an immense oppor­tu­nity for inves­tors to support sustainable deve­lo­p­ment while gene­ra­ting returns. They explain the USP of their approach — measu­ra­bi­lity, that is, the scien­ti­fic assess­ment of sustaina­bi­lity via tail­o­red impact indicators.

Recently, Special Purpose Acqui­si­tion Compa­nies (“SPACs”) have been hyped as inves­tors, espe­ci­ally in the US. These are publicly traded compa­nies that only hold cash and are ther­e­fore often refer­red to as “blank check compa­nies.” In his presen­ta­tion, Prof. Rüdi­ger Loitz (Faculty of Busi­ness Admi­nis­tra­tion, Univer­sity of Colo­gne) discus­ses the requi­re­ments and chal­lenges of a SPAC tran­sac­tion and provi­des an over­view of deve­lo­p­ments in the German environment.

The acute danger from the pande­mic seems to have been aver­ted. But ever new chal­lenges in corpo­rate finan­cing, growth or distres­sed mergers & acqui­si­ti­ons incre­asingly require alter­na­tive approa­ches, such as sale & lease back. Carl-Jan von der Goltz (Maturus Finance) explains how econo­mic reco­very can succeed despite remai­ning uncer­tain­ties. — Thomas Jäger (LM Audit & Tax) will provide an over­view and valuable prac­ti­cal tips regar­ding the current deve­lo­p­ments with regard to the Fund Loca­tion Act and the impli­ca­ti­ons for private equity and real estate.

Warranty and indem­nity insu­ran­ces have been an inte­gral part of M&A tran­sac­tion prac­tice for many years. Phil­ipp von Braun­schweig, LL.M. (POELLATH) discus­ses market trends in the S&I insu­rance market and their impact on M&A contract practice.

The FYB 2022, with 512 pages, is growing by about 8 percent and is beco­ming incre­asingly popu­lar. You will also find entries of foreign private equity compa­nies that want to be present in the FYB Finan­cial Year­Book and on the German market. FYB 2022 features 275 stan­dard entries: inclu­ding 133 private equity firms, 30 law firms, 41 corporate
Finance specia­lists, 3o busi­ness and HR consul­tants, 35 networks. FYB 2022 thus remains the leading refe­rence work for alter­na­tive finan­cing in Germany and regu­larly offers you inte­res­t­ing news at www.fyb.de.

Since­rely, Yours
Tatjana Anderer