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DÜSSELDORF, FRANKFURT AM MAIN, LUXEMBOURG, PARIS, 24.06.2020
ODDO BHF Asset Management’s first Private Debt Fund provides financing to German “Mittelstand” companies
The European Investment Fund (EIF) has made a cornerstone investment of up to EUR 50 million, using resources from the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe.
ODDO BHF Asset Management has successfully completed the first closing of ODDO BHF “Mittelstand” Senior Loan Fund, which is dedicated to professional investors exclusively. For this first closing and in the context of the Corona crisis, the company has raised EUR 131 million. Commitments have predominantly been provided by institutional clients across Europe, among them the European Investment Fund (EIF) as well as the ODDO BHF group.
The EIF commitment has been made under the “Private Credit Tailored for SMEs” programme. Launched in December 2018, the programme combines resources from the EIF and EFSI. The purpose of the “Private Credit Tailored for SMEs” programme is to foster private institutional investment in support of more market-based and tailor-made funding solutions for European SMEs and small mid-caps.
The German Mittelstand is made of SME’s (Small and Medium Sized Enterprises), often family-owned, innovative and market leaders in their respective field. The fund will now be able to support successful German “Mittelstand” companies to accelerate their transformation and growth.
The vehicle will invest both in senior secured loans and unitranche instruments and the financing volume of the individual loans will amount to EUR 5 - 25 million. The investment phase of the fund comprises 3 years, the vehicle aims at a target volume of EUR 300 million.
The specialized five-member private debt team under the direction of Dr. Markus Geiger, Head of Private Debt at ODDO BHF AM GmbH, has a combined experienced of more than 50 buy-outs and corporate acquisitions in the German “Mittelstand” sector. The team also benefits from the longstanding expertise of ODDO BHF AG, active since 1987 on the German senior loan market as a specialist for complex financing transactions.
Currently institutional investors are showing increasing interest in coupon-bearing loan funds. At the same time, medium-sized companies are looking for alternative sources of financing. Private debt funds bring both sides together: they can offer to potential investors an attractive risk/return profile with the risk of capital loss whilst providing flexible capital to borrowers.
Dr. Markus Geiger, Head of Private Debt at ODDO BHF AM GmbH: "With our first private debt fund, we offer financing support to the many medium-sized companies that are highly focused and innovative, and often not listed on the stock exchange, but privately owned. Such a specialized and fragmented market segment can only be served by providers with a strong local presence and heritage. We are proud to be able to launch a fund in these challenging times and are looking forward to becoming a strong financing partner to the German “Mittelstand”.”
Nicolas Chaput, CEO at ODDO BHF AM, adds: “We are happy to provide our professional investors a unique solution by offering access to the corporate champions forming the backbone of the German economy. This new Private Debt expertise demonstrates our ability, as a Franco-German player, to bring innovative and value-added strategies to our clients.”
EIF Chief Executive Alain Godard said: “Providing debt funds to small businesses is an efficient alternative to classic bank loans through bespoke debt packages, speedy deployment and flexibility. It is an important part of EIF’s strategy aimed at strengthening the ties between institutional investors and the public policy objective of supporting the development and growth of SMEs. I therefore very much welcome our cooperation with ODDO BHF AM. Together with the support of the ´Investment Plan for Europe’ it demonstrates Europe’s strong commitment to improving access to finance for European entrepreneurs.”