Deutsche Beteiligungs - Stability during volatility

Deutsche Beteiligungs (DBAG) grew its net asset value (NAV) by c 5% during the quarter. This was supported by the strong share price performance of its largest holding, the quoted Homag, which rallied c 20%. Revenue and earnings growth was positive at its other companies, which drove a c 4% increase in its NAV ex cash and Homag. Near term, management remains aware of the slowing economic growth, both domestically and in Asia, and cautioned that the rate of growth in revenues and earnings for investee companies will probably remain subdued. DBAG’s share price has rallied strongly over the last month (c 10%), but remains c 6% (ex cash and listed securities) below its NAV. Given uncertainty within the eurozone, the decline in Homag’s price since quarter end (c -18%) and lower discount than other listed private equity (PE) funds, DBAG’s current valuation appears reasonable.