Looking into FY26: High deal activity expected

Increased deal activity expected. As highlighted during the company’s Q3 earnings call, the CEO reiterated expectations for elevated deal activity over the coming twelve months, with targeted divestments of up to 20% of NAV. In our view, the strategic focus should primarily lie on assets held within the older DBAG VI fund, of which four investments remain. DBAG VI was launched in 2013 and has effectively reached the end of its fund life, implying that no further management fees are being generated. Against this backdrop, fund investors are likely to increasingly expect realizations and capital distributions, which should further incentivize an accelerated exit pace.

Assuming an average valuation uplift of at least 15-20% versus NAV (eNuW), DBAG should be able to generate meaningful income from investment activity. Moreover, the divestment of mature assets and the resulting capital returns would, in our view, create a solid foundation for the launch of a new fund, both in terms of track record and investor confidence.

Raising additional funds. Looking ahead, we believe DBAG could consider raising DBAG IX as a successor to DBAG VIII. The exact timing is likely to depend on the group’s divestment momentum, as a number of existing investors may be inclined to roll over committed capital into a new vintage. A successful fundraise would not only increase DBAG’s financial firepower for future investments but should also provide a structural uplift to fund services earnings. In this context, we estimate an incremental contribution to fund services EBITA of around € 2-3m p.a. reflecting a 15-20% increase (eNuW).

Further, we also see the possibility for a second continuation fund. Mind you, the group’s current continuation fund (single-asset fund to hold an asset beyond the original fund life, while giving LPs a liquidity option), which was launched in 2024 with a volume of € 130m is fully invested, holding the portfolio company Solvares.

Continued high shareholder returns. DBAG also appears well positioned to maintain its shareholder-friendly capital allocation policy. We expect the company to continue paying a base dividend (eNuW: € 1.00 per share, a yield of c. 4%). In addition, DBAG is currently executing a € 20m share buyback program. With roughly six weeks remaining, we estimate that some € 6m could still be outstanding at the end. Given the shares’ persistent and still significant discount to NAV, we would view the launch of a subsequent buyback program as sensible from a capital allocation perspective.

We confirm our BUY rating with an unchanged € 39 PT based on SOTP (DCF for Fund Services + discount to our NAV per share estimate at year-end).

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