In a recent fireside chat hosted by Giovanni Amodeo, Markus Geiger, the head of private debt at ODDO BHF Asset Management, delved into the intricacies of identifying opportunities in the lower mid-market in the DACH region. The discussion covered a range of topics crucial for investors and market analysts.

Geiger’s Background and Role at ODDO: Geiger, with a 25-year career supporting SMEs, transitioned from management consulting to private equity before joining Oddo in 2018. Oddo, a Franco-German financial institution managing approximately €140 billion, focuses on wealth and institutional asset management. Geiger emphasized Oddo’s evolution from traditional banking to asset management, particularly in private debt fund structures.

Advantages of Large Organizations: Geiger highlighted the benefits of being part of a large organization like Oddo, such as access to corporate resources, in-house legal support, and direct investor contacts, which bypass the need for third-party placement agents. This integration facilitates a robust approach to asset management and fundraising.

Deal Flow and Differentiation in the DACH Region: A significant portion of the discussion revolved around deal flow, with Geiger noting that about 50% comes through intermediaries, while the rest is a mix of direct contacts from private equity sponsors and privileged channels within the Oddo group. He pointed out the competitive advantage of being in the DACH region, home to a dense concentration of SMEs and hidden champions, which provides a rich environment for private debt opportunities.

Market Dynamics and Future Outlook: Addressing market concerns like insolvencies and delinquencies, Geiger acknowledged the challenges posed by operational pressures and rising interest rates. However, he remains optimistic about the resilience of the private debt sector, citing disciplined underwriting and strong partnerships as key to weathering economic storms.

Strategic Focus and Growth Aspirations: Looking ahead, Geiger sees continued growth in buy-and-build strategies and anticipates a resurgence in platform deals as the market adjusts to higher interest rates. He also expressed enthusiasm for expanding Oddo’s private debt offerings, emphasizing the importance of scale and the potential for introducing new strategies.

Key timestamps:

00:08: Introduction
00:37: Markus Geiger’s Background
02:17: Overview of the ODDO Group
03:12: Private Asset Strategies at ODDO
04:32: Advantages of Being Part of a Large Organization
07:04: Challenges and Advantages of Private Assets within the Group
08:03: Deal Flow and Deal Sourcing
09:52: Differentiating in the DACH Region
16:01: Concerns about Insolvencies and Delinquency Rates
19:39: Confidence in the Asset Class
20:53: Private Equity Trends and Opportunities
22:33: Future Market Trends
23:32: Strategies and Growth Prospects
24:53: Strategic Solutions and Capital Stack
26:07: Changing Investor Attitudes
27:09: Aspirations for ODDO Private Debt