Debt funds could soon lend as cheaply as banks. How this is possible, and how the credit funds prepare for the next crisis?

Date 28 August 2019

Type Investment Banking

The private debt market has witnessed an impressive boom in recent years – this applies particularly to Germany. Loans from private investors currently account for more than 50% of credit financing for company takeovers in the mid-cap LBO market in Germany. Against the backdrop of the current weakening of the general economic data and substantial upheavals in leading German industries such as the automotive industry, many market observers are asking themselves how the various lenders will react to crises in companies to which they have provided capital as equity or debt. For private equity funds in particular, it is also a question of whether they will lose companies to banks or private debt funds in the event of a crisis.

Robert von Finckenstein, Managing Partner and Head of Debt Advisory in Germany, and Maximilian Rohardt, Managing Director in Debt Advisory, discussed with German publication Finance Magazin why debt funds could soon lend as cheaply as banks and how they are preparing for the next crisis