DThe US investor Davidson Kempner, who is known as a hedge fund, will in future be involved in the restructuring business for ailing companies in Germany. The partner for this is the new company Birkenstein Capital of the restructuring expert Tobias Hoffmann-Becking, who previously headed the corresponding division of the merger consultant Rothschild. Davidson Kempner acts as the exclusive financier for Birkenstein, said Hoffmann-Becking in an interview with the FAZ. Investors are riding the rising wave of bankruptcies and restructuring cases that are threatened with insolvency.
Davidson Kempner is known in this country as one of those hedge funds that get involved in ongoing takeovers. He prevented the acquisition of the diagnostics company Qiagen by the US group Thermo Fisher after describing the offer as too low and getting other shareholders behind him. He later temporarily hindered Vonovia's purchase of Deutsche Wohnen. But the investor also operates a restructuring business. According to Hoffmann-Becking, he owns 17 of the $37 billion in assets that Davidson Kempner manages globally. The restructuring expert, son of the renowned former Hengeler-Mueller lawyer Michael Hoffmann-Becking, headed Rothschild's restructuring unit for ten years until 2020. He then worked for the investment company Blue Cap, most recently as CEO.
A wave of bankruptcies is sweeping through the country
The number of bankruptcies has risen rapidly – according to Destatis, by almost a quarter in the first ten months of 2023 compared to the same period last year. Hoffmann-Becking names three main factors: rise in interest rates, shortage of skilled workers and energy prices – the latter two as cost drivers in operational business. “We see increased demand coming,” he said. The majority of cases handled by Birkenstein are likely to be those in which companies are already in distress but have not yet become insolvent. This part will make up “three quarters to four fifths”. Birkenstein Capital is already in discussions with seven companies. Depending on the case, majority or minority investments and the granting of outside capital are possible. Davidson Kempner should give amounts from “15 or 20 up to 300, 400 million” per transaction. Birkenstein sees itself as a long-term partner beyond the restructuring phase.
Health, wood and chemistry
Hoffmann-Becking named health, the wood industry and chemistry as sectors. Competitors include investors such as SVP, Centerbridge and Apollo, as well as the German private equity companies Aurelius and Mutares, which specialize in emergencies.
In Germany, the insolvencies of important companies in the Signa real estate group are currently causing a stir. In addition, real estate developers have declared insolvency because they could not cope with the increased interest rates and the end of the real estate boom. In October, the Gravenbrucher Kreis, an association of leading insolvency administrators, reported on insolvencies among clinics and care facilities. The German Hospital Society (DKG) recently registered more bankruptcies than ever before.
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