Only been involved with Search Funds and entrepreneurial acquisitions for a few months now, interested in Germany in particular. It seems many Search Funds in Germany manage to raise search capital quite quickly, but the rate of non-acquisition is very high it seems.
from what i have heard there were at least 4 or 5 that did not manage to acquire in the last 5-6 years. And rumours are 2-3 further ones are shutting their current searches down soon. On the acquisition side there have only been 4 or 5, so less than 50% of raised funds didn’t acquire.
what are the reasons? It can’t be the economy as its been quite strong. Nor covid. Is it age of searchers (too young) as perceived by sellers? competition in buying too high? „Flawed“ local investor base? Wrong talent/searchers? It is not a lack of availability in bank debt.
very curious to hear what you all think. Subjective views and hypothesis very welcome.
Search Funds not working in Germany?
by an investor from University of Commerce Luigi Bocconi
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Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
- The approach with to the owner seems more relevant than in other markets
- Owners must see themselves in you
- Search could've been too narrow
As an extra: I've had someone in my friend circle who preferred to liquidate his fairly successful small freight company as he could not find the right successor and refused to sell it to a larger regional competitor.