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.