SGT German Private Equity Shifts Focus to Artificial Intelligence

SGT German Private Equity GmbH & Co. KGaA announced its strategic realignment towards artificial intelligence (AI), intending to operate under the new name 'German AI Group'. This shift comes alongside a significant change in operational direction, including the discontinuation of its subsidiary's private equity asset management business, SGT Capital Pte. Ltd., attributing to underperformance and cloudy prospects. The company also repurchased 36.7 million of its own shares, reducing the total outstanding shares and increasing the free float to 75%.

The company's revised guidance for 2023 reflects these changes, forecasting an operational loss of 7 cents per share, a notable adjustment from the expected net profit of 10 cents per share. This adjustment is partly due to the cancellation of a prospective PE transaction and a reassessment of sales expectations. Furthermore, the anticipated need to write down goodwill and other assets contributes to a revised equity book value of approximately 1.95 EUR per share, down from 2.15 EUR per share. This strategic reorientation leverages the founder Christoph Gerlinger's deep tech experience and aims to capitalize on the burgeoning AI market. Further details on the strategic realignment are expected in the second quarter.