Kartesia opens second German office in Munich

The pan-European GP has added to its Frankfurt office in a market once seen as so bank-dominated that funds would be unlikely to get a foothold.

Kartesia, the pan-European capital provider for small and mid-sized companies, has taken its number of offices across the continent to seven with the addition of a base in Munich, which becomes the firm’s German headquarters.

Germany becomes the only country where Kartesia has more than one office, as it has one in Frankfurt. The others are in Brussels, London, Luxembourg, Madrid and Paris.

The move underlines the growing significance of the German private debt market. A study by investment bank GCA Altium revealed that, in 2012, all 28 senior debt and unitranche deals tracked by the firm were financed by banks. Having only appeared on the radar in 2013, debt funds accounted for a 56 percent market share of mid-cap leveraged buyout deals in the first half of 2019 – compared with 44 percent for the banks.

Until recently the prevailing view was that German banks were simply too dominant – and their financing too cheap – to cede market share to debt funds. However, as the banks have retreated and funds have come forward with more flexible solutions, that view has changed. Germany is also benefiting from increased caution surrounding the UK, Europe’s largest private debt market, as the furore over Brexit rumbles on.

From its Munich office, Kartesia will offer financing and co-investment solutions to entrepreneurs, management teams and private investor groups in Germany, Austria and Switzerland. The office will be headed by Giuseppe Mirante, a former managing director at HIG Bayside. He is joined by Thomas Pöhler, who joined Kartesia in 2013 having previously worked in the leveraged finance team at Commerzbank.

Kartesia now has 40 professionals working for its pan-European credit fund, targeting investments of between €10 million and €80 million in SMEs with EBITDA ranging from €3 million to €30 million.

Kartesia’s Credit Opportunities IV fund held a final close on €870 million in October 2017 – beating its target of €750 million.