The work of Worms Advisory with its corporate clients creates opportunities for institutional investors to invest in fixed rate debt instruments of large Mittelstand companies.

Institutional investors are thus enabled to optimise their medium to long-term investment portfolios in several ways.

The multi-year-long, ultra-low interest rate environment has caused ongoing pressure on revenues and interest income for institutional investors. In the Euro area, this has become particularly evident in the life insurance sector, as well as with pension funds, foundations and similar institutions.

These and other investors have a very long investment history and expertise and are very knowledgeable regarding the fixed income market and its instruments. They can therefore focus mainly on issuer credit analysis and the general fit and suitability of the debt instrument in the context of their legal requirements, as well as their own investment rules and objectives.

Typcially, the nominal amount of a funding transaction will not be less than EUR 10mm on the company side. The individual investment amounts on the side of institutional investors are roughly in line with this.

Investment opportunities related to the consulting work performed by Worms Advisory offer numerous advantages to institutional investors, including:

• • Fixed interest income in Euro – no rate-reset or floating rate risk, no currency risk
  • Interest rate income well above existing fixed income alternatives
  • Investment opportunities via well-known, established instruments
  • Legal certainty through documentation based on German Law
  • Opportunity to optimise maturities / Reduction of ALM mismatch (long-dated liabilities, such as pension liabilities, can be covered through long-dated fixed rate investments)
  • Customised maturities – possible due to the private, bilateral nature of the funding provided
  • Minimal complexity – especially compared to hedge fund, infrastructure and real estate investments
  • Diversification opportunity through investments in new „credits“
  • Investment opportunity into the „backbone of the German economy“ – established, often owner- or family-managed companies of the large section of the Mittelstand, which often are national, European or even global leaders with their products and services.
  • Transparency through regular reporting and direct contact to the management of the issuing borrower.