Deutsche Beteiligungs AG (DBAG) reported a mixed first half of 2026, with robust operational performance from its portfolio companies offset by declining valuation multiples for peer group companies, leading to a negative net asset value (NAV) per share of 33.65 euros as at 30 June 2026, down from 36.37 euros at the end of 2025. The company adjusted its forecast for the financial year 2026 on 16 July, citing the decline in valuation multiples as the primary reason.
Net income for the first half of 2026 stood at -34 million euros, compared to 8.2 million euros in the prior-year period, driven largely by valuation-related effects. EBITA from Fund Investment Services amounted to 6.8 million euros, slightly down from 7.1 million euros in H1 2025. Available liquidity was 96.7 million euros, down from 103.1 million euros at the end of 2025.
In terms of transaction activity, DBAG agreed upon or closed seven transactions in the first six months of 2026, including three acquisitions and four disposals. Notably, the exits of duagon and Kraft & Bauer from DBAG Fund VII were completed. New investments totaled 90.5 million euros, with three key deals: DBAG Fund VIII acquired a majority stake in Hipp Technology Group, a healthcare technology company; DBAG acquired a minority stake in Bug Bounty Switzerland, an AI-driven cybersecurity firm, as a Long-Term Investment; and DBAG ECF IV agreed to acquire a majority stake in TNL Group, a service provider supporting the energy transition. The TNL Group transaction is expected to close in Q3 2026.
Despite the challenging environment, DBAG's portfolio companies performed robustly, making positive overall contributions to gross gains and losses on measurement and disposal. However, this was not enough to offset the negative impact of declining valuation multiples for peer group companies, which are used to value DBAG's portfolio.
The company returned 26.1 million euros to shareholders via dividends and share buybacks in the first half. DBAG intends to continue its shareholder-oriented distribution policy, aiming for a cash dividend of at least 1.00 euro per share annually and regularly reviewing share buyback programs.
The broader economic context has been strained by geopolitical challenges, including the armed conflict in the Middle East, disruptions to global trade routes, and tariff announcements, which have dampened growth in Europe and pressured Germany's export-driven economy. While AI-based software solutions offer productivity gains, they also threaten some business models, contributing to lower valuation multiples in certain sectors.
Tom Alzin, Spokesman of the Board of Management, commented, "From an operational perspective, our portfolio companies generated positive earnings contributions in the first half of the year, but this was more than offset by lower valuation multiples for peer group companies in certain sectors. That is why we revised our forecast for 2026 on 16 July. That makes no difference to our course: we still invest where we see structural growth and sell when the conditions are right. It is precisely during periods like these that attractive opportunities for sustainable value growth present themselves."
The adjustment in forecast and the impact of valuation multiples underscore the sensitivity of private equity valuations to market conditions, highlighting the importance of long-term operational performance in navigating cyclical downturns.
