Investment Grade Risk, High Yield Return*
* Internal Rating methodology imply a A- credit rating. Unofficial rating based on simulations. It does not take into account liquidity or legal risk inherent to private debt
Liquidity risk and constrained capacity provide an attractive risk-return profile for both equity and debt holders
Financing the real economy
SMEs are an important driver of the European economy. However, there is an increasing challenge of financing
Disengagement of banks
- Growth financing through bank loans has drastically shrinked over the years: Eur 400B* financing gap in Europe
- Banks consider SMEs’ loans to be capital intensive and risky
- More stringent loan approval processes and higher collateral for SMEs
Growth of direct lending
- Private debt funds propose faster application processes and higher flexibility than traditional banks
- 50% of business debt financing in Europe comes from private debt funds
- Direct contribution to the real economy: 50% of private debt capital is allocated to SMEs
