How would you describe the appetite for private debt among German investors?
Appetite for private debt in Germany is still huge. However, if I may stay with the reference, investors are by no means all selecting the same course from the private debt menu. Some are already thinking about dessert, while others haven’t even picked up the napkin yet.
Those who have put their first commitments with funds of funds are now moving on to choose single funds. Those who started with single funds straight away are complementing their portfolios now with more niche strategies away from the plain-vanilla, pan-European core strategies of corporate direct lending.
The good news is, basically all institutional investors have gained insights into the asset class – we have left the educational level behind. Even those who aren’t active so far are set to become so. Investors already committed to private debt have usually not reached their target allocation, which typically ranges from 3 to 10 percent of AUM. In other words, there is still some potential for growth in the German market.
How did you end up in your current career?
It was by no means straightforward. My original educational background is civil engineering.
I then started working in management consulting at AT Kearney and took a path, via really heavy-lifting corporate restructuring and mergers and acquisitions, into the asset management branch of Gothaer, a German insurance group. We managed roughly €1 billion in assets in private markets, including our own private equity fund comprising a variety of equity and debt strategies backing mid-market companies
From there, and by profiting from an excellent know-how around all matters regarding private markets and the regulatory environment an insurance company is facing, a colleague and I started BB Alternative Partners. Today we are proud to service many institutional clients and fund managers across Europe.
What was your original career goal?
My original career goal was imposed by my family, which was very active in the construction business at all steps of the value chain. The need for a succession solution too early brought me involuntarily to mergers and acquisitions, as I sold the family business through some very complex transactions. That was in the 90s and, looking back from today, it might have been interesting to participate in today’s surging real estate markets.
What would you advise someone new to the industry?
Become super expert in a specific area of the private markets industry – the one that really excites you – and then by no means try to stay a ‘mono-liner’ but
get as much experience as you can and build your network as broadly as possible. Our industry is quite old-fashioned, actually. It’s all about people, experience and mutual trust.
What’s the one thing about Alexander Bode our readers would never know?
I designed and built a wooden bridge spanning the River Ilmenau in northern Germany, having been a civil engineer. It is still passable, even for motor traffic. Try Rote Schleuse Bridge yourself. n
What’s the most surprising question you’ve had from someone in private debt?
In 2014, an investor asked me when banks will come back and push funds out of the debt market. He firmly believed that bank regulation must be relieved in the mid-term otherwise the business model would collapse.
His description of the regulations’ effect was impressively detailed and far-sighted. But I, coming from a highly regulated insurance background, was surprised that someone could think regulation would be reversed in the foreseeable future. I tried to explain that we would have to be very old to see this reversal. He was not convinced.