Olya Klüppel (Global Growth Capital), Jurij Puth (GSO), Jürgen Breuer (Pemperton Asset Management), Stuart Hewer (SEB), Dr Nicolaus Loos (IKB Deutsche Industriebank AG) and Didier Beltai-Menth (Bayerische Landesbank), discussed the current German debt finance environment and the competition between banks and (alternative investment/debt) funds as provider of financial accommodation. McDermott’s, Dr. Oliver K. Hahnelt moderated the panel discussion.
In exchanging thoughts on the German debt finance environment, the discussion started with pointing out the reasons/deciding factors to choose a bank, rather than an alternative investment/debt fund, or vice versa. Apart from factors such as documentation, flexibility, covenant loose structure, fast credit approval process and a swift closing, it was identified that the choice for a bank or a fund, often is pre-determined by the business sector and/or asset type to be financed.
Based on such findings, Dr. Hahnelt led the discussion as to whether the German leverage finance market will see a continuing or even fiercer competition between banks and funds. All panellists agreed that the relationship between banks and unds indeed has an inherent competitive element. However, it was highlighted that apart from competition, there are more and more trends for collaboration. That is true in particular for the corporate lending sector, where banks and funds may provide to the benefit of the same corporation different means of financial accommodation.
The panel closed with a brief—but lively—discussion on the regulatory environment and whether or not funds as “shadow banking” providers should be subject to a similar restrictive regulatory regime as banks to ensure a level playing field or whether alternative investment/debt funds are diversified from banks, not justifying the introduction of a comparable regulatory framework at all.