Digital workout for German SMEs

Europe seems to have survi­ved the worst of the Corona pande­mic for the time being. But econo­mic uncer­tainty remains high. This is also reflec­ted in the invest­ment stra­tegy of finan­cial inves­tors. On the one hand, sellers’ valua­tion ideas often do not yet reflect the indi­vi­dual oppor­tu­nity and risk situa­tion. On the other hand, it will now be crucial to finally create the neces­sary infra­struc­ture and the right mind­set for digi­tiza­tion and inno­va­tion in future-proof tech­no­lo­gies and services. What SMEs need now is a work­out program for sustainable digitization.

Indus­try segmen­ta­tion is the be-all and end-all if you want to make a state­ment about the current status. We do not neces­s­a­rily expect a rapid reco­very in some sectors — the medium-term effects of the Corona crisis on many compa­nies will only become visi­ble slowly. Espe­ci­ally tourism and gastro­nomy start delayed. Whether custo­mer habits change will only be seen later. Capi­tal goods and auto­mo­tive are very much depen­dent on the future assess­ments of unsett­led entre­pre­neurs and consu­mers. It is not yet possi­ble to say where this will level off. Howe­ver, even before Corona, we were cautious about cycli­cals and disrupted sectors. Thus, we are deal­ing here with a cata­lyst for a deve­lo­p­ment that has long since begun. The compa­nies that are most attrac­tive to inves­tors are those that can quickly adapt their busi­ness to the “new normal” and profit from it. These are not always as obvious as Amazon and Zoom. German SMEs have a lot to offer here in terms of small, inno­va­tive companies.

The right lever is to invest now in inno­va­tion and infra­struc­ture for digi­tiza­tion. The highly flexi­ble and indi­vi­dual struc­tures of German SMEs in parti­cu­lar have the best prere­qui­si­tes for this. The equity provi­ded by a long-term thin­king SME finan­cier is the appro­priate lubri­cant for this. Short-term thin­king by invest­ment bankers will not be a solu­tion that works here. It does not make sense to sepa­rate deve­lo­p­ment and produc­tion due to econo­mic pres­sure from Corona and labor cost advan­ta­ges quickly calcu­la­ted on the excel sheet. In order to keep process inno­va­tion and the asso­cia­ted know-how and trai­ning in the German SME sector, produc­tion must also be local. This will only be possi­ble through incre­asing auto­ma­tion. Compa­nies that offer products and services for this purpose are promi­sing invest­ment opportunities.

About VR Equitypartner
VR Equi­typ­art­ner is one of the leading equity finan­ciers in Germany, Austria and Switz­er­land. The company supports medium-sized family busi­nesses in a goal-orien­ted manner and with deca­des of expe­ri­ence in the stra­te­gic solu­tion of complex finan­cing issues. Invest­ment oppor­tu­ni­ties include growth and expan­sion finan­cing, corpo­rate succes­sion or share­hol­der chan­ges. VR Equi­typ­art­ner offers majo­rity and mino­rity invest­ments as well as mezza­nine finan­cing. As a subsi­diary of DZ BANK, the central insti­tu­tion of the coope­ra­tive banks in Germany, VR Equi­typ­art­ner consis­t­ently puts the sustaina­bi­lity of corpo­rate deve­lo­p­ment ahead of short-term exit thin­king. VR Equitypartner’s port­fo­lio curr­ently compri­ses around 100 commit­ments with an invest­ment volume of EUR 500 million. For more infor­ma­tion, visit www.vrep.de.