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Mid-market corporates

Sienna IM’s Private Credit expertise provides companies access to financing backed by the various assets on their balance sheets (fixed as well as current assets) and has based its positioning and added value from the outset on a deep understanding of possible risks and of the various assets accepted as collateral.

This goes beyond the basic credit analysis generally carried out at the time of a bank loan, thus making it possible to offer a borrowing capacity more favorable to the company, to be secured by the value of the assets taken as collateral.

Mid-market corporate debt funds have focused essentially on asset-based corporate lending (using receivables, inventories, transportation equipment, machinery or real estate as collateral) instead of senior unsecured debt in order to reduce drastically both correlation with credit cycles and losses given default.

Sienna Hephaistos, the first private debt financing strategy dedicated to SMEs and mid-caps of the BITD, is part of Sienna IM’s long-standing approach to financing mid-market companies, with more than 160 transactions representing nearly one billion euros completed since 2010.

 

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Financing of companies backed by the various assets on their balance sheets

The SMB/MSB loan market has undergone a profound transformation characterized by a marked deterioration of the conditions offered to companies with the best credit quality, a steep decline in unsecured loans and the emergence of new players (including loan funds), some of which are inaugurating new techniques (Fintechs).
For lenders, the growth of collateralized financing (leasing of industrial equipment, financing of inventories, trade receivables, etc.) addresses the need for risk management.

Our scoring approach is consistent with the investment strategy conducted in each of our businesses and includes a threefold analysis which is central to overall assessment of the projects slated for inclusion in the assets of funds managed by Sienna IM’s Private Credit team:

  • Understanding of the debtor by a credit analyst with solid credit experience acquired in a bank or rating agency
  • Understanding of and ability to evaluate the underlying and/or collateral assets
  • A particular focus on the loan agreement, its clauses and its legal enforceability, which have a significant impact on the successful completion of operations and, consequently, on the strength of the portfolio and its attractiveness to investors.

Sienna IM’s Private Credit expertise relies on the expertise of its partner Neftys for the pre-financing of the Research Tax Credit (RTC) for innovative SMEs and ETIs and for professional training (CPF). Neftys has developed an electronic platform allowing SMEs and ETIs or training institutes respectively to constitute their pre-financing files.