- Experienced entrepreneurs generate economic equity for German midmarket (“Mittelstand”) companies
- First fund aims at triple-digit million Euro volume
These days, more than a dozen of entrepreneurs and top managers of the German economy establish an initiative to improve the supply of economic equity to the German Mittelstand. With “Rantum Capital”, they founded a bank-independent asset manager which will already become active in the current year. A first fund managed by Rantum Capital, “Rantum Mittelstand Capital I”, anticipates investing a triple-digit Euro volume. The Rantum Capital founders include Air Berlin founder Joachim Hunold, former BDI (Federation of German Industries) president Michael Rogowski, the CEO of the Frankfurt Institute for Risk Management and Regulation (FIRM) Wolfgang Hartmann, TRIMET founder Heinz-Peter Schlüter, media entrepreneur Karlheinz Kögel, former Metro CEO Hans-Joachim Körber and former Henkel CFO Lothar Steinebach. Dirk Notheis and Marc Pahlow will lead the operating team of Rantum Capital.
The entrepreneurs react to the fact that German Mittelstand companies continue to have a lower equity ratio than comparable companies in other countries. Equity ratios of hardly more than 20 percent frequently do not allow for headroom to secure sufficient bank loans for corporate development. Michael Rogowski, inter alia former president of the BDI, describes the motivation behind the new company in his new role as Chairman of Rantum Capital’s Advisory Board: “The future of the German Mittelstand relies on itsability to constantly develop innovations and thereby create growth. Therefore, it is important that a lack of economic equity does not become a bottleneck. This is were we come in with our financing and generate additional potential for growth and new jobs.”
In the past decade, several banks were active in this market, however abandoned the business as a result of the financial market crisis and increasingly strict rating requirements. Now the banks focus primarily on the supply of debt. Rantum Capital aims to fill parts of the gap and therefore considers itself a partner and not a competitor of banks. In addition, securitized capital markets transactions initiated several years ago now mature. For 2013 and 2014 a refinancing volume of approximately 2.3 billion EUR is anticipated and approx. 400 companies will face the challeng of refinancing. Next to the financing of growth projects and Mittelstand companies with generational transfer situations, the initiation of Rantum Capital is also a reaction to this anticipated demand.
The investment activity is thought to occur in an entrepreneurial way. The financing provided by the Fund will be structured as a subordinated loan, the cost of capital is partly linked to the economic success of the financed company. This is thought to ensure that the financing can be classified as equity from the perspective of banks and rating agencies. The entrepreneur does not face loss of control and remains the decision maker. Rantum Capital anticipates that the individual financings will range between 2 and 20 million EUR per company. Rantum Capital does not intend to become involved in the financing of restructuring situations or start-ups.
Rantum Capital will raise the capital via funds open to institutional investors, such as insurance companies, pension funds, endowments or family offices. First capital commitments have been secured already. The attractiveness of the investments is based on two pillars. On the one hand, the funds can offer attractive return opportunities, especially in the light of the current low interest rate environment. On the other hand, they are able to offer investors access to the German Mittelstand, an asset class traditionally difficult to invest in.
Managing Directors of Rantum Capital will be Dirk Notheis, Marc Pahlow and Fritz Koop. Collectively they possess long-term experience in Mittelstand financing as well as capital markets and therefore the corresponding networks both to relevant companies as well as to institutional investors and banks.
The founders of Rantum Capital are experienced entrepreneurs and top managers aiming to make their experiences available to the German Mittelstand and encompass the following individuals:
- Joachim Hunold – Founder and long term CEO of Air Berlin*
- Dr. Dirk Notheis – former CEO of Morgan Stanley Bank AG*
- Marc Pahlow – formerly The Carlyle Group*
- Fritz Koop – formerly managing director of several internal Mittelstand funds of WestLB
- Dr. Michael Rogowski (Chairman) – former CEO of Voith and President of BDI
- Karlheinz Kögel – Founder and President of Media Control and L’TUR
- Heinz-Peter Schlüter – Founder, former CEO and Chairman of the Supervisory Board of TRIMET Aluminium AG and Chairman of the Supervisory Board of Scheidt & Bachmann
- Jürgen B. Harder – Founder and CEO of J.B. Harder Group
- Dr. Hans-Joachim Körber – former CEO of Metro, Chairman of Air Berlin*
- Dr. Dirk Schmalenbach – Partner at Freshfields Bruckhaus Deringer
- Dr. Lothar Steinebach – former CFO of Henkel*
- Wolfgang Hartmann – CEO of the Frankfurt Institute for Risk Management and Regulation (FIRM), former Chief Risk Officer of Commerzbank*
- Roman Kainz – Founder and CEO of Euro-China Group
- Hendrik Borggreve – several senior positions in the banking sector (e.g. CEO Kleinwort Benson Germany)
- Burchard von Arnim – CPA, founder and CEO of von Arnim Private Consulting GmbH, Wirtschaftsprüfungsgesellschaft
*Also member of the Investment Committee (Chairman: Wolfgang Hartmann)
Download: Press Release – 04. February 2013