Private Equity in the German Mittelstand 2025 – Opportunities in a Challenging Environment

published on 2 October 2025 | Reading time approx. 2 minutes

Germany’s private equity sector entered 2025 with cautious optimism. Our latest study, based on an analysis of over 350 private equity firms active in Germany and supplemented by a market survey, reveals that despite a difficult previous year, investment appetite remains strong – with a clear focus on the Mittelstand.

Private Equity Study 2025

Now in its 14th edition, our Private Equity Study 2025 (in German) provides in-depth insights into the German investment landscape, with a particular emphasis on the Mittelstand segment. By analyzing the investment criteria of more than 350 private equity firms operating in Germany and conducting a complementary market survey, the study demonstrates that private equity continues to be a key driver of economic development. It helps to identify opportunities and challenges in the market through a differentiated and data-driven lens.

Key Findings

The small and mid-cap segment proves to be especially resilient. Investors in this space benefit from more stable financing conditions, while large-cap transactions continue to be affected by geopolitical uncertainties and tighter lending standards. As a result, many funds are increasingly targeting medium-sized companies with revenues of up to €250 million. Around 30% of firms focus on businesses with annual revenues between €50 million and €250 million, while 42% concentrate on EBITDA ranges between €10 million and €15 million. The majority of investors prefer majority stakes and typically invest equity amounts of up to €50 million.

Most investors plan to execute three to four deals per year, while exits remain cautious. Unrealistic price expectations and the strained economic environment are among the biggest hurdles. At the same time, the fundraising climate appears more stable than in previous years, indicating a potential market normalization.

No dominant sector focus has emerged: Industrials, Services, IT/Software, and Healthcare are all considered attractive investment areas. Increasingly, sector-specific expertise and the ability to leverage proprietary access and differentiated value creation strategies are key to securing competitive advantages.

Conclusion

Germany continues to be a significant target market. The Mittelstand, with its strong entrepreneurial foundation and growing succession pressure, offers diverse entry opportunities. Private equity is positioning itself not only as a capital provider but increasingly as an active partner for growth, transformation, and sustainable value creation.