Austria has seen the full spectrum of private equity transactions, from seed and growth
capital to buyout transactions. Auctions have become quite unpopular with many funds
because of Derce competition. Negotiated deals, on the other hand, typically involve a large
amount of management time.
Nationale Investitionskontrollregime sind am Maßstab der Grundfreiheiten zu messen. Indirekte Direktinvestitionen fallen (meist) nicht in den Anwendungsbereich der FDI-ScreeningVO. Dies sind die wesentlichen Erkenntnisse aus dem Urteil in der Rs C-106/22, Xella, in dem sich der EuGH erstmals mit der Frage der Vereinbarkeit eines der von den MS erlassenen Investitionskontrollregimes mit der VO (EU) 2019/452 ( FDI-ScreeningVO) und den EU-Grundfreiheiten auseinanderzusetzen hatte. Die vom EuGH gezogenen unionsrechtlichen Grenzen sind im Rahmen nationaler Investitionsprüfungen zu beachten.
The main vehicles used for private equity funds in Austria are limited partnerships (LPs),
typically with a corporation (limited liability company (LLC) or joint-stock company (JSC))
as the general partner. Each of the aforementioned types of entity has a separate legal
personality, but partnerships are transparent for tax purposes.
Market participants have adapted to the covid-19 pandemic and supply chain issues, which
resulted in robust private equity activity until around mid-2022. From mid-2022, activity
started to slow down in general, but in particular in the venture capital sector and less so
in the growth capital segment, as investors got more cautious given the macro-economic
downturn. This may cause certain auctions scheduled for 2023 to be postponed until there
is better overall visibility. We would also expect distressed M&A to pick up in 2023 as this
time around no government support schemes are planned.
Venture capital (VC) provides seed funding and early-stage expansion and growth capital for start-ups and emerging growth companies. Individual angel investors and VC funds supply the funding and capital primarily in (priced) equity financing transactions and via (unpriced) convertible loans or forward equity instruments (eg, simple agreement for future equity (SAFE) or simple equity investment contracts (SEICs). Angels and VCs fund fast-growing start-ups led by promising entrepreneurs at negotiated private company valuations that are intended to be attractive enough to yield significant upside gains as the portfolio companies grow, generate revenues and eventually exit in a company sale or an initial public offering (IPO). Exits via an IPO are rather the exception and, if completed, happen on a foreign exchange.
Private M&A transactions in Austria are commonly structured as share deals. The specifc details of each transaction vary depending on the parties involved. The buyer and seller begin by defning their objectives, conducting a preliminary due diligence and evaluating the transaction’s strategic fit. They may engage advisors such as investment bankers, lawyers and accountants to assist in the process.
Austria is generally considered a creditor-friendly jurisdiction,
although the introduction of the new Reorganisation Code via
the Restructuring and Insolvency Directive Implementation Act
now provides an additional option for debtors to restructure in
pre-insolvency situations.
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