“In the current interest rate environment, with banks lending less money, there is a clear opportunity in the lower mid-market private debt in Europe. We’re excited to offer an appealing solution through this new Eltif,” said Renato Guerriero, deputy CEO and chief sales and distribution officer at Candriam, in a press statement announcing the launch of the new European long-term investment fund on Monday 10 February 2025. Photo: Candriam

“In the current interest rate environment, with banks lending less money, there is a clear opportunity in the lower mid-market private debt in Europe. We’re excited to offer an appealing solution through this new Eltif,” said Renato Guerriero, deputy CEO and chief sales and distribution officer at Candriam, in a press statement announcing the launch of the new European long-term investment fund on Monday 10 February 2025. Photo: Candriam

Candriam and Kartesia have launched a joint Luxembourg Eltif aimed at providing private debt access in the European lower mid-market, offering a diversified investment strategy with a focus on sustainability.

Luxembourg-based Candriam, a multi-asset manager focused on sustainable and responsible investing with nearly €149bn in assets under management, and Kartesia, based in Leudelange, a firm specialising in private capital solutions, have announced the launch of a joint European long-term investment fund (Eltif) aimed at expanding investor access to private debt opportunities in Europe’s lower mid-market (LMM) sector.

The fund is intended to provide financing to businesses in the European LMM, where companies often encounter more limited access to capital compared to their larger counterparts. It will be made available in Austria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Portugal, Spain and Sweden, pending regulatory approvals, according to a press statement issued on Monday 10 February 2025.

The fund aims to offer a diversified loan portfolio across various sectors and geographies, with a focus on sustainability. The investment strategy combines Candriam’s fund management and distribution capabilities with Kartesia’s specialisation in the LMM sector. The fund consists of two investment components. The first, representing 15% of the fund, is a liquid short-term corporate credit and money market segment managed by Candriam. The remaining 85% is allocated to private credit strategies focused on cash-flow-generating businesses, managed by Kartesia. According to the firms, this structure is intended to mitigate risk and provide stable returns.

Renato Guerriero, deputy CEO and chief sales and distribution officer at Candriam, noted in the announcement that private market access for retail investors had been limited in the past, but changes in the Eltif framework had addressed this issue. He highlighted that, in the current high-interest rate environment, banks have reduced lending, creating opportunities in the European LMM private debt sector. He also emphasised that Candriam and Kartesia had over two decades of experience in private and liquid credit management.

Charles-Henri Clappier, partner and head of KSO France and business development at Kartesia, stated that Eltifs focused on private debt are important in expanding investor access to this asset class. He explained that Kartesia’s expertise in the European LMM sector, combined with Candriam’s distribution and fund management capabilities, would facilitate the effective implementation of the fund.

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