The Fourth Phase: Frustrating Times 1992–1994

Abstract

Given the trials and tribulations of the early phases, it may seem difficult to comprehend that later phases of private equity in Germany were possible. One explanation for the next phase must be that newcomers thought they would never make the same mistakes as the pioneers. Indeed many of the individuals who helped set up new private equity houses at the beginning of the 1990s were well familiar with the problems of Matuschka, 3i, and Barings. A second explanation is that the market was considered too promising to be tarnished by a few bad deals. Succession problems were considered to be rife in Germany, providing opportunities for new funds to prove their worth. A final, perhaps more cynical explanation, is that bankers have been known to have short memories. Money had been lost, but there were still abundant opportunities for future gain.