ODDO BHF Asset Management has launched its first private debt fund with a €50 million cornerstone commitment from the European Investment Fund.
The vehicle will focus on providing finance to German Mittelstand companies and has held its first close on €131 million. Capital was raised from institutions across Europe including EIF and ODDO BHF group. The fund is targeting €300 million for its final close.
EIF’s commitment was made under its private credit tailored for SMEs programme, launched in December 2018, which aims to foster private institutional support for financing SMEs and small mid-caps in Europe.
The fund will invest in senior secured loans and unitranche loans of between €5 million and €25 million over a three-year investment phase.
It will be led by Dr Markus Geiger, head of private debt at ODDO BHF AM with a five-person private debt team with combined experience of more than 50 buyouts and acquisitions in the Mittelstand.
“With our first private debt fund, we offer financing support to the many medium-sized companies that are highly focused and innovative, and often not listed on the stock exchange, but privately owned,” Geiger said.
“Such a specialised and fragmented market segment can only be served by providers with a strong local presence and heritage.”
EIF’s chief executive, Alain Godard, added: “Providing debt funds to small businesses is an efficient alternative to classic bank loans through bespoke debt packages, speedy deployment and flexibility. It is an important part of EIF’s strategy aimed at strengthening the ties between institutional investors and the public policy objective of supporting the development and growth of SMEs.”