Midcap loans

Institutional investors have the opportunity to allocate institutional capital into promising midcap companies that seek to grow, to become more sustainable or to refinance their business. This middle segment significantly contributes to an important part of economic activity and forms the backbone of many European economies. This strategy covers medium-sized businesses and corporations that are located in European countries.

There are different options available, such as senior, subordinated and unitranche floating loans. Senior loans typically demonstrate higher recovery rates relative to, for instance liquid corporate bonds due to availability of covenants and collateral. Such a relatively attractive risk profile, combined with the existence of an illiquidity premium, offers an interesting opportunity for investors who can hold on to their investments in midcap loans for the entire loan maturity (between three and seven years).

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