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SOLUTIO and Pantheon close private debt secondary fund of EUR 510 million.

Photo: Robert Massing, Member of the Manage­ment Board at SOLUTIO AG
24. May 2022

Grün­wald near Munich/ London — The invest­ment specia­lists SOLUTIO, Grün­wald near Munich, and Pantheon, London, have success­fully closed their second joint private debt secon­dary fund. Like its prede­ces­sor product, SOLUTIO PREMIUM Private Debt II invests in funds that pool private corpo­rate loans (private debt). The final closing took place in May 2022 at 510 million euros. This is double the amount of the first fund of this type, SOLUTIO PREMIUM Private Debt I, which closed in Febru­ary 2020 at EUR 250 million.

“During the Covid pande­mic, it became appa­rent that the private debt asset class is more stable than the public finan­cial markets. This is also eviden­ced by the very good perfor­mance of our first fund over the past two years,” said SOLUTIO CEO Robert Massing. “Our offe­ring is getting a lot of tail­wind because insti­tu­tio­nal inves­tors are very inte­res­ted in invest­ment oppor­tu­nities with an attrac­tive risk-reward profile and low volatility.”

“The doub­ling of volume in the second fund compa­red to the first reflects the gene­ral market trend — private debt is curr­ently gaining signi­fi­cant market share globally,” said Ralph Günther, Part­ner and Head of DACH Region at Pantheon. “On the one hand, many banks are incre­a­singly with­drawing from the lending busi­ness due to regu­la­tory pres­sure. Second, there is a catch-up poten­tial of private debt compa­red to the longer estab­lis­hed asset class of private equity.”

Like its prede­ces­sor product, SOLUTIO PREMIUM Private Debt II invests in medium-sized compa­nies (mid-market) prima­rily in Europe and North America. Once again, 75 to 85 percent of the funds raised will be used for senior loans (senior debt), inclu­ding unitran­che, and 15 to 25 percent for subor­di­na­ted / other debt. The main focus here is again on loans for compa­nies held by private equity compa­nies (“corpo­rate spon­so­red deals”). In the past, these have mostly repor­ted low default rates.

More than 90 percent of the fund port­fo­lio is hedged against rising inte­rest rates and infla­tion with so-called floa­ting instru­ments. If central banks conti­nue to raise inte­rest rates, as is widely expec­ted, then port­fo­lio returns would also conti­nue to rise.

SOLUTIO AG and Pantheon also operate this fund as a part­ners­hip in a joint venture. Pantheon is one of the leading private market fund mana­gers with a global presence (Ameri­cas, Europe, Asia) and 40 years of expe­ri­ence in private finan­cial markets.

SOLUTIO AG

SOLUTIO AG, foun­ded in Munich in 1998, deve­lops inno­va­tive invest­ment concepts espe­cially for the needs of German and Austrian insti­tu­tio­nal inves­tors in the field of real assets. SOLUTIO initia­tes invest­ment concepts exclu­si­vely toge­ther with mana­gers who have a proven track record of above-average success. The company itself also parti­ci­pa­tes in all invest­ment concepts. In the past 24 years, SOLUTIO AG and its joint venture part­ners have laun­ched a total of 20 invest­ment programs in the asset clas­ses of private equity, infra­st­ruc­ture, private debt and real estate with a total volume of over 6.5 billion euros.

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