Wasn’t there something at the time of the financial crisis in 2008 and in the years before that? German state banks and loans securitized into packages? But no, whatever, let’s get back to the present. The Landesbank Hessen-Thüringen (Helaba) is now offering packages for investors that are filled with loans from the Landesbank. Helaba is expanding into the area of credit funds. From now on, the bank wants to package some of the loans it grants into funds and offer them to investors.
This gives these professional investors new investment opportunities, while at the same time Helaba gains more breathing room in its own balance sheet. The first fund is already in place. “For the first time, Helaba is now putting together debt funds itself as a bank, which we offer via our new HLB Private Markets platform in Luxembourg,” says Christian Wolff, Head of Syndicate & Investor Markets Asset Finance, in an interview with Bloomberg News. After the start-up phase, two to three loan funds are planned per year. “Helaba will never completely outsource a loan to such funds, but will always keep part of the loan on its own balance sheet until the end of the term.”
The funds can only have one investor or a small group of investors. The target volumes of the funds are between 200 million euros and 500 million euros. Helaba’s “Infrastructure Debt Fund I” is now the first to be implemented. The partner here is a single, large Canadian institutional investor who is not named. “The first series of funds contains parts of loans that Helaba granted in the infrastructure segment. So we are looking for co-investors for these loans,” said Wolff. The spectrum ranges from digital infrastructure to renewable energies such as wind power and solar systems to land transport assets. Additional asset classes will be added in the future.
According to Wolff, the shares of individual loans in the loan funds will only amount to around 20 million to 30 million euros in order to create the necessary granularity. Wolff sees Helaba as having advantages over other providers of credit funds. “Unlike other debt funds that first raise money from investors and then look for investment opportunities, our robust deal flow means we can often show our co-investors in advance which loans they are investing in,” he said.
Packaging its loans also brings advantages for Helaba. “The debt fund platform is a further step towards more balance sheet flexibility,” said Wolff. This means that risks on Helaba’s own balance sheet are reduced. Mount Street acts as an independent portfolio manager for the HLB Private Markets platform. Fund management and services are provided by APEX Group.
FMW note: Basically, investors should always ask themselves: Why does a bank outsource loans? Is the risk of a loan too great for you and would you rather pass it on to investors at a discount, who then have to bear the risk? But well, these are institutional investors, i.e. real professionals. And they definitely know what they’re doing. Certainly. And finally, you are looking for higher returns than with standardized interest investments.
FMW/Bloomberg
2023-09-20 10:11:09
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