Abstract:

In a dynamically changing market environment, this paper examines the role and relevance of private equity co-investment funds and their ability to provide investors with access to resilient companies. Despite observed declines in private equity transaction activity in 2023, influenced by macroeconomic uncertainties and changing interest rates, innovative financial instruments such as continuation vehicles and co-investment strategies developed in response to these challenges are presented. A particular focus is on the growing importance of ESG (environmental, social and governance) in the private equity industry and its implications for medium-sized companies, especially in Germany. The paper also highlights Germany's digital backwardness compared to other EU countries and how private equity can serve as a catalyst for digital transformation and ESG integration. Through an in-depth analysis of current trends and challenges, this article offers valuable insights into the evolving landscape of private equity and its potential impact on the global SME sector.