Thorsten Gröne

"Private Equity in Germany

 Evaluation of the Value Creation Potential for German Mid-Cap Companies"

In April 2005, key opinion leaders in Germany raised a controversial public discussion about private equity: ‘Are helpless German companies being squeezed out by greedy financial investors from overseas’? At that point in time, this diploma thesis ‘Private Equity in Germany’ had already been written and its results point out that the public perception of private equity may be negatively distorted. It concludes that rather than being squeezed out, actual value can be generated by private equity investments in German mid-cap companies, also known as the ‘Mittelstand’. This thesis analyzes the financial concept of private equity and applies specific value generation levers to German mid-cap companies. The result is an evaluation of the value generation potential for this special segment of the German economy. It shows that the traditional value generation concept of private equity is applicable but needs to be adjusted to account for the characteristics of German mid-cap companies: Above all, private equity associations have to address the social considerations and the traditional unity of management, ownership, and supervision in the mid-cap segment in order to realize the high rates of return that private equity investors expect.

About the author:

Thorsten Gröne studied International Business at ESB Business School, A.B. Freeman School of Business, Tulane University New Orleans, and Northeastern University Boston. He graduated in 2005 with a concentration in Finance and received diplomas from both Northeastern University and ESB Business School. Thorsten further gained international work experience in internships with leading financial services and consulting companies. After attending Harvard’s HPAIR conference in Tokyo in the summer of 2005, Thorsten started his professional career as a consultant with the Monitor Group in Munich.