Any private debt discussion in Europe will involve Germany. That’s according to Deborah Zurkow, head of alternatives at Allianz Global Investors, and one of the speakers on the lead panel at this year’s PDI Germany Forum.
Despite the market’s relative infancy compared to other European private debt markets, Germany is still Europe’s largest economy and still of significant interest to private debt managers. “When you’re doing any private debt in Europe, the length and breadth of Germany is always a point of positive discussion,” Zurkow said.
Zurkow added she’s looking to hear more about the nature of the German debt market. Specifically, one question attendees might want answered is how private debt funding fits into the picture of other financing options for German businesses.
“European private debt is still a market in formation,” Zurkow noted. “I’m looking at getting a fuller picture of the German debt market particulars.”
Adding private debt to sources of financing already present in Germany may allow investors to better gauge the risk/return characteristics of debt securities available to them. “The more funding source you have, the clearer the risk/reward.”
Another topic of conversation Zurkow is anticipating at the forum is regulation. With distinctive debt markets in Europe, it’s worthwhile digging down into specific regulations governing particular markets.
“Depending on where you are in the market, your awareness and sensitivity may differ regarding the impact of regulation going forward,” Zurkow said. “I’m really interested in what others’ views are about German regulation and its impact on market developments.”
Another forward-looking area of discussion could be centred on how many debt funds are beginning to take on board environmental, social and governance (ESG) factors when making investments.
“It will be interesting to see how much ESG comes up,” Zurkow said. “Some countries are taking steps on ESG reporting so it will be interesting to see if it comes up from a German perspective.”