{"id":43879,"date":"2018-11-26T11:24:33","date_gmt":"2018-11-26T09:24:33","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/proper-selection-of-a-private-debt-provider\/"},"modified":"2018-11-26T11:24:33","modified_gmt":"2018-11-26T09:24:33","slug":"proper-selection-of-a-private-debt-provider","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/proper-selection-of-a-private-debt-provider\/","title":{"rendered":"Proper selection of a private debt provider"},"content":{"rendered":"

Marcel Herter<\/strong> \u2014 Foun\u00adding Part\u00adner at Herter & Co. GmbH, Frankfurt\/Main<\/p>\n

Lars Schultz<\/strong> \u2014 Vice Presi\u00addent at Herter & Co. GmbH, Frankfurt\/Main<\/p>\n","protected":false},"excerpt":{"rendered":"

The number of private debt funds opera\u00adting in the German market has increased signi\u00adfi\u00adcantly over the past ten years follo\u00adwing the finan\u00adcial crisis. They are now an estab\u00adlished alter\u00adna\u00adtive to tradi\u00adtio\u00adnal LBO bank finan\u00adcing but also to bank loans for medium-sized compa\u00adnies, espe\u00adci\u00adally when the desi\u00adred finan\u00adcing is not available in the banking market.<\/strong><\/p>\n

The rise of private debt can be attri\u00adbu\u00adted not only to the high level of insti\u00adtu\u00adtio\u00adnal liqui\u00addity in the market and gene\u00adral invest\u00adment pres\u00adsure, but also to the more rest\u00adric\u00adtive lending poli\u00adcies of banks follo\u00adwing the finan\u00adcial crisis. Alter\u00adna\u00adtive markets such as the Bond\u2011M market are also often no longer available. The further the finan\u00adcing sought moves from the invest\u00adment grade rating towards non-invest\u00adment grade, the more likely a debt fund is the prefera\u00adble alter\u00adna\u00adtive. Howe\u00adver, debt funds \u2014 even those that operate conser\u00adva\u00adtively \u2014 have to apply a higher pricing due to the increased credit risk and also because of the higher refi\u00adnan\u00adcing expen\u00adses compared to banks.<\/p>\n

Debt Fund Finan\u00adcing Compared to Tradi\u00adtio\u00adnal Bank Financing<\/em><\/p>\n

Compared to bank finan\u00adcing, debt fund finan\u00adcing usually offers a higher maxi\u00admum finan\u00adcing volume, a longer term and does not require repay\u00adments. Banks, on the other hand, value redemp\u00adti\u00adons to reduce risk. Debt funds also usually offer grea\u00adter flexi\u00adbi\u00adlity in terms of free\u00addom with regard to docu\u00admen\u00adta\u00adtion and covenants.<\/p>\n","protected":false},"featured_media":23826,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2457,2493,2495],"product_tag":[1545,1554,1560,1567,1575,1577,1585,1590,1595,1599,1601,1606,1609],"class_list":{"0":"post-43879","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-fyb-2019","8":"product_cat-marcel-herter-en","9":"product_cat-lars-schultz-en","10":"product_tag-financial-crisis","11":"product_tag-lending","12":"product_tag-private-debt-funds-en","13":"product_tag-lbo-bank-financing","14":"product_tag-non-investment-grade-en","15":"product_tag-investment-grade-en","16":"product_tag-credit-risk","17":"product_tag-refinancing-expenses","18":"product_tag-financing-volume","19":"product_tag-private-debt-provider","20":"product_tag-marcel-herter-en","21":"product_tag-lars-schultz-en","22":"product_tag-herter-co-ltd","23":"pa_ausgabe-deutsch-en","24":"pa_ausgabe-englisch-en","26":"first","27":"outofstock","28":"taxable","29":"shipping-taxable","30":"purchasable","31":"product-type-variable"},"yoast_head":"\nProper selection of a private debt provider - FYB Financial Yearbook<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fyb.de\/en\/produkt\/proper-selection-of-a-private-debt-provider\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Proper selection of a private debt provider - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"The number of private debt funds operating in the German market has increased significantly over the past ten years following the financial crisis. They are now an established alternative to traditional LBO bank financing but also to bank loans for medium-sized companies, especially when the desired financing is not available in the banking market. The rise of private debt can be attributed not only to the high level of institutional liquidity in the market and general investment pressure, but also to the more restrictive lending policies of banks following the financial crisis. Alternative markets such as the Bond-M market are also often no longer available. The further the financing sought moves from the investment grade rating towards non-investment grade, the more likely a debt fund is the preferable alternative. However, debt funds - even those that operate conservatively - have to apply a higher pricing due to the increased credit risk and also because of the higher refinancing expenses compared to banks. 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