The private-debt market was going strong when the COVID-19 crisis placed this asset class on centre stage. Even one of history’s largest governmental stimulus packages cannot meet the financial needs that the COVID-19 crisis created among Mittelstand companies. The situation has only been made worse by the rating downgrades that have been spurred by the decline in earnings.
We are witnessing an acute and immediate financing gap. The necessary solutions can only be provided by private debt suppliers that – like Patrimonium – have already experienced an end-of-credit cycle and the 2008–9 financial crisis. The credit-seeking companies enjoy concrete advantages: we work independently of official rating systems, offer tailor-made financing models, are flexible and execute fast.
The crisis has triggered an unprecedented level of high-quality deal flow in the unrated corporate debt universe. Patrimonium is ready to respond, as it did in the past, with both new and existing products.
Our approach is underpinned by the very close monitoring and management of our portfolio investments. Drawing on the experience of the last financial crisis, we believe it is crucial to stay extremely close to our portfolio companies in times of crisis and remain in constant touch with them. We strongly believe that active portfolio management is key for portfolio performance, especially in times of stress. That’s why we put in place a special COVID-19 reporting mechanism at all portfolio companies and are providing our investors with a detailed line-by-line report every two weeks.