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Access to the attractive European unitranche lending space

We help institutional investors benefit from private debt by focusing on unitranche financing in the attractive lower middle market.

2+bn
EUR invested
30
professionals
71
transactions
100+
relationships
  • Partnering with investors
  • Working with sponsors and companies

As banks in Europe have pulled back from leveraged lending in recent years, driven by regulatory concerns, private debt providers have stepped into the gap to help European companies grow. Institutional investors have naturally taken an interest in this relatively new asset class, which offers an attractive risk-reward profile and differentiated risk drivers to help diversify a portfolio. As young as the asset class in Europe is, it has already become a well-populated space, with dozens of providers pursuing a range of strategies.

We focus on companies in the lower middle market (entreprise values of EUR 50–250 million):

 

  • Companies in this space are characterized by stable pricing and prudent levels of risk, yet they pay high cash coupons that drive returns
  • The simplicity of unitranche financing is its strength, as typically only one or two lenders are involved in a transaction, which makes it much easier to resolve any issues that arise during the life of a loan
  • Working with our private debt team enables investors to benefit from the experience of a pioneer in the European private debt market, as it arranged the first-ever unitranche transaction in Europe already in 2007. In fact, the team has invested EUR 2.1 billion across 70 private debt transactions since 2005

Resilient strategy

The resilience of our private debt strategy is based on the strength of our team, which includes four partners who have worked together for more than 12 years and have an average of 21 years of industry experience. They are supported by a larger team of 19 professionals based in London and Paris, who are dedicated to sourcing, analyzing and negotiating private debt investments. They have built up extensive relationships with more than 65 private equity sponsors and 45 intermediaries across Europe. This includes many of the top-tier mid-market sponsors in Europe, ensuring a steady flow of deals with attractive companies. Together, they further leverage LGT Capital Partners' larger private markets platform of more than 130 professionals, who have relationships with hundreds of private equity sponsors, who also frequently have debt financing requirements.

Our team's private debt investment efforts have resulted in a cycle-tested track record stretching back to 2005. Since then, investors have realized EUR 1.6 billion from 40 arranged investments, with an annual loss rate of just 0.2% on total assets. They have also benefited from a recovery rate of well over 100% on a small number of defaulted assets, demonstrating the team's strong focus on downside protection in the portfolio.

We help companies obtain the necessary debt financing to achieve their business plans with the use of unitranche and or subordinated debt. The simplicity of unitranche financing stems from the fact that it is a bespoke financing solution with:

 

  • Increased speed and certainty of execution
  • Fewer institutions to deal with
  • Non/limited amortizing allows cash flow to be invested in the business
  • Multi-currency transactions
  • Availability of undrawn acquisition lines to finance capex/add-on acquisitions
  • Easier documentation process

Learn more about the investments in our portfolios

 

Learn more about the investments in our portfolios Portfolio companies overview

For any queries about private debt, please contact us

Matthew Gordon Clark
Partner
Biography

Phone +44 20 7850 46 15
E-mail

+44 20 7850 46 15

Etienne Haubold
Partner
Biography

Phone +33 1 40 68 06 66
E-mail

+33 1 40 68 06 66

Stéphane Legrand
Partner
Biography

Phone +33 1 40 68 06 66
E-mail

Juan Carlos Morales Cortes
Partner
Biography

Phone +44 20 7850 46 15
E-mail

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