CASE STUDY
European private debt
Italian Pension Plan | Autumn 2018
- Home
- What we do
- bfinance Case Studies
-
European Private Debt
Engagement at a glance
In seeking to make their first ever allocation to private debt, this Italian pension plan was keen to cast a wide net in order to achieve returns of 5-8% net of fees.
With this in mind, we examined all three major sub-sectors of the private credit market: real estate, infrastructure debt and direct lending. In addition, the investor was keen to examine both senior and subordinated debt across all of these categories. Educational support was a high priority in this project, particularly given the lack of in-house experience with this asset class.
Client-specific Concerns
Although this investor had somewhat restrictive criteria, due to specific operating procedure requirements, it was important not to dismiss potentially interesting opportunities at the outset of the project, so as to develop a full understanding of the strategies available during this investor’s first exploration of the market.
Outcome
- Market education and knowledge transfer. The various credit segments and transaction types within them were discussed from the outset, but really came to life during the detailed review of different managers. The client was able to keep broad remit and an open mind while gaining a detailed understanding of the various strategies, and only decided to focus on senior secured debt from corporate debt / direct lending managers during the later stage of the search.
- Optionality: 39 offers were assessed and quickly narrowed to 26 based on the investor’s operating procedures. This included a range of offerings across all three sectors (corporate, real estate and infrastructure) as well as different parts of the capital stack (senior secured vs subordinated debt). These were clustered into different groups for analysis, in order to compare solutions on a like-for-like basis.
- Customisation to client needs: The RFP was specifically designed for this investor’s particular requirements, as was the manager scorecard. The second stage report, which provided more granular analysis of the eight most appropriate offers, contained Italian translations of critical portions. After four managers presented their offerings in front of the client’s board, the investor’s views were also incorporated in final scores and recommendations.
Our specialist says
-
Private debt can be interpreted in many different ways, but the risks involved in achieving the same return target across corporate debt, real estate debt and infrastructure debt are very different. In order to avoid getting lost in the weeds it was important to use a systematic and customised process when comparing and contrasting different strategies.
-
United States, Chicago
220 North Green Street
Chicago
IL 60607
Telephone: (312) 829-4353
Email: info@bfinance.com
-
Canada, Montréal
1250 Rene Levesque Boulevard West
Suite 2200, Montreal
Québec H3B 4W8
Telephone: +1 450 902-4965
Fax: +1 514 393 9069
Email: info@bfinance.com
-
Canada, Toronto
88 Queens Quay West
Suite 2500, Toronto
Ontario M5J 0B8
Telephone: +1 (416) 560-7275
Email: info@bfinance.com
-
United States, Chicago
220 North Green Street
Chicago
IL 60607
Telephone: (312) 829-4353
Email: info@bfinance.com
-
Canada, Montréal
1250 Rene Levesque Boulevard West
Suite 2200, Montreal
Québec H3B 4W8
Telephone: +1 450 902-4965
Fax: +1 514 393 9069
Email: info@bfinance.com
-
Canada, Toronto
88 Queens Quay West
Suite 2500, Toronto
Ontario M5J 0B8
Telephone: +1 (416) 560-7275
Email: info@bfinance.com
-
United Kingdom
36 Queen Street, London
EC4R 1BN
Telephone: +44 20 7747 8600
Fax: +44 20 7747 8600
Email: info@bfinance.com
-
Germany
Theresienstraße 1
80333 Munich
Telephone: +49 89 55 29 59 00
Fax: +49 89 55 29 59 00
Email: info@bfinance.com
-
France
49, Avenue d'Iéna
75016 Paris
Telephone: +33 1 45 02 64 00
Fax: +33 1 45 02 64 01
Email: info@bfinance.com
-
Netherlands
Symphony building
Gustav Mahlerplein 3-115, 26th Fl
1082 MS Amsterdam
Telephone: +31(0)20 794 61 00
Email: info@bfinance.com
-
United Kingdom
36 Queen Street, London
EC4R 1BN
Telephone: +44 20 7747 8600
Fax: +44 20 7747 8600
Email: info@bfinance.com
-
Germany
Theresienstraße 1
80333 Munich
Telephone: +49 89 55 29 59 00
Fax: +49 89 55 29 59 00
Email: info@bfinance.com
-
France
49, Avenue d'Iéna
75016 Paris
Telephone: +33 1 45 02 64 00
Fax: +33 1 45 02 64 01
Email: info@bfinance.com
-
Netherlands
Symphony building
Gustav Mahlerplein 3-115, 26th Fl
1082 MS Amsterdam
Telephone: +31(0)20 794 61 00
Email: info@bfinance.com
-
Australia
Level 8, 99 Elizabeth Street, Sydney
NSW 2000
Telephone: +61 (0)2 8052 3930
Email: info@bfinance.com
-
China
Level 20, Infinitus Plaza,
199 Des Voeux Road Central, Sheung Wan
Telephone: +852 3953 7874
Email: info@bfinance.com
-
Australia
Level 8, 99 Elizabeth Street, Sydney
NSW 2000
Telephone: +61 (0)2 8052 3930
Email: info@bfinance.com
-
China
Level 20, Infinitus Plaza,
199 Des Voeux Road Central, Sheung Wan
Telephone: +852 3953 7874
Email: info@bfinance.com