• Debt funds invest in super senior and senior secured transaction financing for medium-sized corporates and first lien ship mortgage loans for vessels from the major commercial shipping segments
• Berenberg’s debt fund portfolio thus grows to 20 funds by the end of the year with an overall target volume exceeding 5 billion euros

The private bank Berenberg continues its successful debt fund strategy with two new closed-end multi-investor funds. The funds are aimed for institutional investors and are launched by Germany’s oldest private bank alongside with Universal-Investment- Luxembourg as Alternative Investment Fund Manager. In total, the AIFM now administers 13 funds of this type with a volume of around 3 billion euros for Berenberg.

Both funds enable investors to make broadly diversified investments in senior secured corporate or ship mortgage loans starting at mid-single-digit million amounts and are intended to continue the successful history of the already existing funds. “The new funds complement a series of debt funds that have been launched exclusively for large institutional investors such as insurance companies and pension funds since 2016. Through the funds, we provided direct loans in the segments of transaction financings, ship mortgage loans as well as financings for renewable energy and infrastructure projects. Berenberg serves as one of the European market leaders the trend that profitable long-term financings are no longer provided by banks exclusively, but also by debt funds,” says Lars Hagemann, Head of Structured Finance at Berenberg. Dr. Sofia Harrschar, Head of Alternative Investments and designated Country Head of Universal-Investment in Luxembourg adds: “Alternative investments such as debt funds are on a strong growth path. More and more investors – even with smaller volumes – are interested in the area of debt financing.”

By exploiting financing niches, the execution of complex financing structures and Berenberg’s strong competitive position in the segment of transaction financings for medium-sized corporates, investors can achieve an attractive return with a conservative risk profile at the same time. “This approach has proven its worth even in a challenging market environment such as 2020 in the light of the Covid- 19 pandemic. All Berenberg debt funds were able to continue their track record without any losses,” said Hagemann. “The interplay of our existing debt funds in this segment enables us as the only market player, to provide large transaction volumes of more than 150 million Euros from one hand in the meanwhile established financing niche of “super senior/first out” and senior LBO market. This is appreciated by borrowers and marks for Berenberg significant competitive advantage.”

In the segment of secured ship mortgage loans, the Hamburg-based private bank pursues an extremely conservative approach with senior secured mortgage loans for the major commercial shipping segments with a maximum loan-to-value of 60 per cent – on average significantly below – and loan tenors in the lower maturity band. “Our long-standing international market presence enables constant access to attractive projects and the structuring expertise of our experienced financing specialists ensures an impeccable track record without defaults. Ship loans have a particularly attractive risk-return-profile due to their first-ranking collateralisation through fungible assets and offer conservative investors an ideal entry into the long-neglected trend topic of maritime trade – which is and remains the backbone of the global economy,” says Philipp Wünschmann, Head of Shipping at Berenberg.

The funds are available for institutional investors of Berenberg as of now.