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We help institutional investors benefit from private debt by focusing on unitranche financing in the attractive lower middle market.
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):
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 more than 20 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: