Private markets in Frankfurt

Private markets cover the deals that never trade on a stock exchange: private equity buys and restructures established companies, venture capital funds early-stage startups, private debt lends directly instead of through a bank, and real assets funds hold property or infrastructure. An investor commits money for years, not days, and a fund manager decides which companies or assets the money goes into.

Frankfurt sits inside this field because it is where much of the money that flows into German private equity and venture capital gets allocated. KfW Capital, the venture capital subsidiary of the state development bank KfW, is based in Frankfurt am Main and invests in venture capital funds, not directly in startups, which is the route most public co-investment in Germany takes. Frankfurt School of Finance & Management runs its Private Markets One program in the city, training the analysts who later join deal teams at the funds themselves.

Frankfurt's private markets community sits alongside its bank and asset-management industry, not in place of it: many buyout and growth-equity professionals come from Deutsche Bank or Commerzbank before moving to a fund, and DWS Group runs its own private markets platform alongside its listed fund business from the same city. International private equity houses keep a Frankfurt office for the same reason banks and asset managers do: access to German institutional investors, pension schemes and insurers that commit to their funds.

The German trade body for the industry, the German Private Equity and Venture Capital Association (BVK), represents roughly 300 members, most of them investment companies active in venture capital, buyouts and growth financing, though the association itself is based in Berlin, not Frankfurt.

Running a private equity or venture capital fund in Germany is a licensed activity under the Kapitalanlagegesetzbuch (KAGB), which transposes the EU's Alternative Investment Fund Managers Directive into German law. A manager applies to BaFin either for a full license or, if it stays under the KAGB's asset thresholds and manages only special funds for professional investors, for the lighter registration that most German private equity managers use in practice.

The EU is revising these rules under AIFMD 2.0, and the planned German Fund Market Strengthening Act (Fondsmarktstärkungsgesetz) will carry the changes into the KAGB, affecting both fully licensed and registered managers. A fund manager new to the field in Frankfurt works out early which category its assets under management and investor base put it in, since the reporting duties differ sharply between the two.

Finance Loop is the meeting place in Frankfurt for people in private equity, venture capital and the asset managers who move into private markets from listed funds. It connects the finance, IT and AI communities and is built in collaboration with TechQuartier and Frankfurt Main Finance.

Finance Loop was a partner of the FinTech Founder & Investor Evening, an event built for founders raising capital and the investors who back them, presented by Finteda, the law firm Schalast and the wealth management software company Fincite. Related pages: venture capital in Frankfurt, asset management in Frankfurt and family offices in Frankfurt.

Public markets trade shares and bonds on a stock exchange, where prices update constantly and any investor can buy in. Private markets deal in stakes, loans or assets that are not listed, so a fund manager negotiates the price directly with the seller and an investor's money stays locked up until the fund exits the position, often after several years.

Private Markets One is a program that Frankfurt School of Finance & Management runs for people who want to work in private equity, venture capital or private debt. It trains the deal analysis and fund structuring skills that Frankfurt's private markets employers look for, alongside the school's asset management and blockchain programs.