Welcome to the latest edition of the Kartesia newsletter, which comes at a very interesting time for our business, not only from a dealmaking perspective (with lots of new transactions already closed this year) but also about the expansion of the firm into new asset classes and with a greater commitment to sustainability and philanthropy.
Earlier this year we announced an exciting partnership with Flexam Asset Management, a leading European fund manager involved in real asset financing in the lower-mid market. This positioning makes Flexam a very complementary partner for Kartesia and gives us access to a part of the market to which we previously had very little exposure.
The past 24 months has presented some of the most challenging circumstances for European businesses in living memory, with both the coronavirus pandemic and energy crisis putting an enormous amount of pressure on company balance sheets. As discussed in our last report, we have been proactive in providing continuous support for the financial health of our portfolio companies. However, one key issue that does often get lost when looking at the health of small and medium sized companies is not that of the balance sheet but of the people that are so crucial to our joint success.
Now is not an easy time to be an investor in any asset class. Both inflationary pressures and the continuing impact of the Russo-Ukrainian war are affecting all markets and leading to a much more cautious approach to investing, which is reflected in the way we are choosing to deploy capital from Kartesia’s range of strategies since 2013. However, first and foremost, we would like to once again extend our heartfelt sympathy to the people of Ukraine and hope for a rapid end to the conflict.
Despite the mass rollout of vaccinations against the coronavirus, 2021 has continued to be a year of uncertainty, with new variants and question marks over vaccine efficacy leading to a seemingly continual tightening and loosening of restrictions worldwide. International travel has been disrupted, domestic political agendas are being rewritten but, above all, the lifeblood of Europe’s economies, its small and medium-sized businesses, are having to adapt their business models (in some cases significantly) in order to survive the pandemic and give themselves the room to thrive in its aftermath.
The private debt model has continued to display its resilience to the impact of the coronavirus which, despite the encouraging rollout of vaccines and lifting of global lockdown restrictions, continues to bring volatility to public equity and fixe
In our last newsletter we focused on the immediate aftermath of the onset of the coronavirus pandemic and how Kartesia’s flexible approach meant we were able to first address the challenges faced by our portfolio companies by providing additional liquidity and then to continue deploying capital from our KSO and KCO funds.
With the festive season and the year-end just a few weeks away, this is a good time to look back over some of the highlights of 2018. For Kartesia, it was a year that brought industry recognition of our decisive approach with a lower mid-market focus, which has driven the alpha delivered to our investors over four fund generations. In fact, KCO III won not one but two Best Direct Lending Fund awards in 2018, beating 30 peers managed by some of Europe’s top managers.
After being named Lender of the Year in 2016 by Private Debt Investor, a highly regarded magazine within the European private debt industry, Kartesia has come away this year with not one but two prestigious awards: Lender of the Year Europe 2017 a