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Risk club deals

Florian Hofer on the private markets podcast

Ever more mergers of loan funds are being created in the shape of club deals. On the Börsen-Zeitung’s “Betting Billions“ podcast, Florian Hofer, Managing Director Private Credit, talks about the latest developments in private debt funds and risks arising from club deals. While these transactions are becoming increasingly commonplace for large deals, they also pose significant challenges in terms of diversification.
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Florian Hofer, Managing Director Private Credit

Focussing on cluster risks: when loan funds are more actively involved in the same deals, the risk spread for institutional investors can be significantly reduced. Florian Hofer also explains the dilemma faced by private debt managers: private equity investors support club deals in order to diversify financing, while institutional investors want to avoid concentration in order to ensure robust risk control.

When it comes to minimising risk, Golding uses a two-step approach: in addition to intensive manager screening, it is crucial in segments where club deals are unavoidable that credit fund managers keep the number of these deals as low as possible.

Listen to the full discussion with Philipp Habdank on the Börsen-Zeitung’s private markets podcast and on all major platforms, for example here (German).

Or read the article on the Börsen-Zeitung website. (€, German).

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