Like the entire financial community, Catalus has been watching European developments with horror and skepticism. Unlike most of the financial community, we believe that where there is uncertainty there is also opportunity. It appears that most European banks have restricted or discontinued lending until stability is restored, which means that our type of capital could start to play a larger role in financing growth, acquisitions, and recapitalizations.
Catalus, of course, differentiates between the Continent's countries. We view the UK and Germany as the most desirable, with Greece and Eastern nations trailing further behind. For us, the specific company, opportunity, and deal structure is far more critical than the "bucket" within which it falls. Our focus will remain on existing cash flow and/or hard assets. In a newly originated deal, our minimum investment will be $10 million (~7.5 million Euro), however it could be less for traded bonds or loans.
No one knows how things will end up in Europe. It is probable that it will struggle for a number of years to come and possible dramatic changes will be made to how the Euro zone is structured and governed. Certainly there are countless risks. Nevertheless, as of today we are updating our website and online profiles to include European investments. Although we may be getting in a bit too early, we believe in the end Europe will prevail and emerge as a stronger global competitor.
Catalus will start an online campaign to generate European deal flow. We will be actively searching for companies looking to borrow money and for intermediaries (investment bankers, deal brokers, lawyers, accountants, and others) that can help make an introduction. If you are in the market, we would love to hear from you at marek@cataluscapital.com.
