"A combination of solid financial analytics and industrial experience makes the difference"

Dr. Dirk Notheis Founder & Managing Director

Financing Instruments

  1. Private Debt
    Our private debt funds focus on structured financings for mid-market companies in Germany, Austria and Switzerland. Main focus are subordinated loans that are often used for the financing of certain situations (e.g. growth capex, add-on acquisition, generational handover) which are only partially banked by senior lenders and therefore require a junior tranche in the capital structure. In our current fund generation (Rantum Private Debt Fund II) we invest 5-30 Mio. EUR per company. Tenor of the loans is typically 5-7 years with bullet repayment. Interest is payable in cash, PIK or a combination of both. Combined with cheap bank financing, the Mittelstand company can realize an attractive weighted cost of capital, thereby enabling growth capex or add-on acquisitions which would otherwise be impossible to finance without diluting equity.
  2. Equity:
    We advise Private Equity Funds with a focus on control investments in family or entrepreneur owned Mittelstand companies in Germany, Austria and Switzerland. The entrepreneur typically retains an equity stake and thus profits significantly from the value creation due to the stimulated growth by our expertise, experience and networks. The typical investment horizon is approx. 5-7 years, in some cases less.

"Both disruption and digitalization need to be considered in each investment decision."

Marc PahlowFounder & Managing Director

Investment Criteria

Our investment focus is on Mittelstand companies from Germany, Austria and Switzerland. The companies typically generate annual EBITDA of 3-50 Mio. EUR.

The main investment criteria in the private debt area is a solid cashflow profile with sufficient debt service ability. We do not invest into insolvency situations, distressed companies, start-ups or greenfield developments, but rather focus on established and profitable companies with strong market positions and further growth ambitions.

The private equity funds are also focusing on established, solid, healthy Mittelstand companies. The further growth potential as well as room for buy-and-build are of special importance.

"Investing into the right people is the most efficient strategy to reduce risk."

Wolfgang HartmannIndustrial Partner & Chairman of the Investment Committee Debt

Financing Situations

  • Growth investments, for example relating to the introduction of new products or technologies
  • Add-on acquisitions, for example the acquisition of smaller competitors or foreign companies in order to gain market access
  • Strengthening of the equity ratio to prepare for future growth and/or to cope with senior lender requirements
  • Refinancing of existing senior facilities, subordinated loans or publicly traded bonds
  • Acquisition financing for buy-in management teams
  • Buyout of minority equity shareholders, for example other family members or financial investors
  • Partial cash out and realization of the company value through financing of a special dividend which is distributed to the owner

"Good strategic advice is quite often worth more than capital."

Dr. Hans-Joachim KörberIndustrial Partner for Retail, Consumer Goods, Food & Beverage

Focus Industries

We invest preferably in industries in which our 16 industrial partners are possessing long-term senior leadership experience, experience and networks. Our current focus is therefore primarily on the following sectors:

  • Machine Making, Capital Goods, Technology & Automation Dr. Michael Rogowski Dr. Hans-Peter Sollinger
  • Industrials, Automotive, Aerospace & Defense, Metal-Processing and Industry 4.0 Klaus Eberhardt
  • Chemicals Dr. Lothar Steinebach
  • Healthcare & Pharma Dr. Karl-Ludwig Kley Thomas Ebeling
  • Retail, Consumer Goods, Food & Beverage Dr. Hans-Joachim Körber
  • IT, Digital & Media Karlheinz Kögel
  • Energy, Infrastructure & Business Services Dr. Alfred Tacke
  • Financial Services Hendrik Borggreve Wolfgang Hartmann
  • Tourism & Aviation Joachim Hunold
  • Logistik, Services & Human Resources Dr. Frank-Jürgen Weise

Sustainable Finance Disclosure Regulation (SFDR)

Transparency of sustainability risk policies (Art. 3 SFDR)

Introduction

Sustainability risk management is embedded in the way Rantum seeks to originate investments and make investment decisions, as well as in ongoing portfolio and asset management activities.

Rantum recognises the importance of identifying, assessing and managing material sustainability risks as an integral part of conducting business.

Consequently, Rantum has developed a clear organisational and structural approach for the consideration of environmental, social and governance aspects within its investments (ESG Guidelines). Furthermore, Rantum has developed a Compliance Manual, which outlines the Firm’s compliance policy including its compliance monitoring structure. This manual also provides clear guidelines regarding the allocation of responsibilities for and the implementation of compliance and ESG procedures.

How does Rantum’s sustainability risk management and ESG guidelines work?

Rantum’s ESG Guidelines set out how sustainability risks are integrated into Rantum’s investment decision-making processes. These guidelines apply to all involved Rantum entities.

As of 2021, Rantum applies a targeted ESG methodology and commissions independent, external ESG consultants to support the continuous implementation of Rantum’s ESG Guidelines, conduct ESG due diligences and support with the monitoring of its portfolio companies’ ESG performance.

Within the investment process, Rantum assesses various ESG aspects to obtain a comprehensive ESG picture of potential investments. The following ESG aspects are thereby considered:

  • Environmental: climate change, pollution, waste management, resource management, environmental footprint in the supply chain
  • Social: staff wellbeing, health and safety, supply chain and human rights, product integrity, safety and quality, community impact
  • Governance: business ethics, code of conduct, board and management structure, internal controls, governance in supply chain, stakeholder engagement and reporting

Through a materiality analysis, ESG aspects that are of particular importance for the investment are identified and taken into consideration when determining ESG risks and opportunities.

Integration of sustainability risks into investment decision-making processes

Sustainability risks are considered at all stages of each product’s investment process, in respect of each individual investment opportunity.

Screening-Phase

In the screening phase, Rantum excludes investments in companies which:

  • Deliberately violate national laws and International Labour Organisation conventions (ILO)
  • Manufacture, sell or market fire arms
  • Are based in countries subject to trade embargoes imposed by the United Nations (UN) or European Union (EU)

Due Diligence Phase

During the due diligence stage of the investment, Rantum, supported by independent, external ESG consultants, assesses various ESG aspects of the investment and determines material risk and opportunities with high potential financial impact on the investment. In order to obtain a thorough understanding of the target companies, the ESG consultants perform a comprehensive desktop research, review relevant documents and conduct interviews with the management and relevant staff of the target investment.

Findings of the ESG Due Diligence will be considered as part of Rantum’s decision making process when providing advice on an investment decision. The investment team is required to apply the above methodology and report on findings as part of the investment committee paper submitted to the Investment Committee for consideration. Rantum may choose to reject an investment should it clearly go against Rantum’s ESG guideline and indicate a high financial risk of the investment.

Holding Phase

During the holding phase, sustainability risks are regularly monitored to ensure consistency with Rantum’s ESG Guideline and business principles. ESG aspects will be specifically addressed in reports prepared by the Fund or its Portfolio Companies, and will be discussed at meetings of the Fund’s Investors.

Transparency of adverse sustainability impacts (Art. 4 SFDR)

No consideration of adverse impacts

The SFDR requires Rantum to make a “comply or explain” decision whether to consider the principal adverse impacts (“PAIs“) of its investment decisions on sustainability factors, in accordance with a specific regime outlined in SFDR. Rantum has opted not to comply with that regime, both generally and in relation to the Funds.

Rantum will keep its decision not to comply with the PAI regime under regular review.

Rantum has carefully evaluated the requirements of the PAI regime in Article 4 of the SFDR, and in the final report on draft Regulatory Technical Standards which were published on February 2nd, 2021 (the “PAI regime“). Rantum is supportive of the policy aims of the PAI regime, to improve transparency to clients, investors and the market, as to how financial market participants integrate consideration of the adverse impacts of investment decisions on sustainability factors. However, Rantum is concerned about the lack of readily available data to comply with many of the reporting requirements of the PAI regime, as Rantum believes that companies and market data providers are not yet ready to make available all necessary data for the PAI regime.

Notwithstanding Rantum’s decision not to comply with the PAI regime, Rantum has implemented positive ESG-related initiatives and policies, as part of its overall commitment to ESG matters, as summarised in this section. For the avoidance of doubt, none of the following information is intended to suggest that Rantum complies with the PAI regime.

Transparency of remuneration policies in relation to the integration of sustainability risks (Art. 5 SFDR)

Rantum (along with its subsidiaries and controlled affiliates, “Rantum“) has established a remuneration policy (the “Policy“) applicable to all Rantum entities. The Policy is developed, approved, implemented and monitored by a series of bodies within the Rantum structure. The Policy applies to all employees of Rantum, save for limited exceptions.

The Policy has been developed with the aim of supporting Rantum’s business strategy, corporate values and long‐term interests, including by facilitating the identification, assessment and management of sustainability risks when determining individual remuneration packages. The key principles of the Policy include fostering appropriate risk culture (including with respect to the management of actual and potential conflicts of interest) and compliance with applicable law and regulation.

The performance management and rewards framework envisioned by the Policy has been designed to promote effective risk management, including in particular by:

  • Ensuring that assessment of performance takes full account of adherence to risk management requirements, covering all relevant types of current and future risks, including sustainability risks;
  • Implementing deferral arrangements using co‐investment and carried interest arrangements for senior personnel, facilitating alignment of interests between staff‐members and third-party investors. If the value of the relevant underlying investment portfolio should decrease (whether arising as a result of a sustainability risk or otherwise), the value of the employee’s holdings will be reduced accordingly; and
  • Providing for reduction of deferred variable remuneration awards to senior personnel in certain circumstances, such as in the event that the entity in which the relevant employee works suffers a significant failure of risk management, or experiences a significant downturn in its financial performance (as determined in the sole discretion of Rantum), including in connection with a sustainability risk concerning an investment.