CORDET Capital: Unlocking the Potential of Northern Europe’s Lower Mid-Market

With a sharp focus on delivering compelling risk-adjusted returns, CORDET Capital has positioned itself as a distinctive force in private credit. The firm’s strategy is centred on the lower mid-market in Northern Europe—a region known for its strong legal frameworks, economic resilience and, crucially, underpenetration by alternative lenders. In a landscape crowded with large-cap debt providers, CORDET’s tailored approach offers investors differentiated access to a market segment characterised by lower competition, attractive yields and strong credit protections.

Strategic Focus on Lower Mid-Market Opportunities

CORDET targets companies with EBITDA between €2 million and €15 million across Northern Europe. This segment benefits from limited competition due to the dominance of strong domestic banking systems and the complexity of local languages and cultures, which create barriers to entry for larger international players. As a result, CORDET enjoys greater bargaining power, stronger loan documentation and enhanced yields per unit of risk.

The firm’s ability to create bespoke financing solutions under its Direct Lending Plus+ strategy has allowed it to embed favourable features such as enhanced pricing, equity warrants and structured fees—features that are often harder to secure at the larger end of the market.

Disciplined Origination and Local Expertise

CORDET’s investment team leverages local sourcing expertise, with offices in London and Stockholm and a deep understanding of regional cultures and languages. This localisation strategy enables the firm to maintain close relationships across more than 700 sourcing channels and 200 sponsor relationships. A sophisticated CRM system supports the origination process, allowing the team to manage and convert deal flow efficiently while ensuring high levels of selectivity.

The result is a consistent pipeline of high-quality, geographically diversified investment opportunities that align with CORDET’s stringent credit standards.

Rigorous Risk Management and Underwriting Discipline

Amid rising interest rates and global uncertainty, CORDET’s robust risk management framework has come to the fore. An independent credit team plays a key role in assessing each borrower’s financial strength, earnings visibility, cash conversion ability, market positioning and management calibre.

This conservative approach extends to structural features: low leverage, strong covenant protection and low loan-to-value ratios are hallmarks of CORDET’s portfolio construction. Post-investment, the team employs maintenance covenants, ongoing compliance checks and stress-testing to ensure real-time insight into portfolio company performance. The Northern European region’s creditor-friendly regimes further enhance downside protection.

Bespoke Solutions to Match Strategic Goals

While the bulk of CORDET’s investments are in senior secured loans, the firm’s flexibility allows it to structure deals with tailored features suited to borrower needs and transaction dynamics. Whether supporting growth strategies, succession planning, or recapitalisations, the investment team evaluates the borrower’s capital requirements in detail to optimise alignment between risk and return.
This approach not only strengthens borrower relationships but also enables the integration of features such as prepayment protection, arrangement fees, and performance-related equity upside—ensuring every loan is structured for resilience and investor value.

Hands-On Partnership with Portfolio Companies

CORDET’s role extends beyond capital provision. It is an active, constructive partner to its borrowers. The firm regularly offers follow-on capital to support companies performing in line with expectations, and has guided management teams through governance and operational enhancements. These contributions have led to tangible improvements in employee engagement, ESG compliance and overall business efficiency—contributing to long-term value creation.

Integrating ESG Principles Across the Investment Lifecycle

CORDET’s ESG approach is embedded into its entire investment process, beginning with exclusion screens aligned with the UN PRI, UN SDGs and TCFD frameworks. ESG considerations inform initial due diligence, investment committee decisions and post-investment monitoring. The firm’s decision to decline investment in a UK manufacturer of single-use plastic additives, despite attractive financial returns, underscores its ESG commitment.

Through its Article 8-aligned fund structure, CORDET tracks ESG metrics using annual questionnaires, incorporates ESG-linked ratchets in loan terms and maintains an internal ESG working group to identify new sustainability initiatives.

Why Northern Europe? A Region of Strategic Advantage

Northern Europe and the UK represent ideal environments for CORDET’s investment strategy. The region enjoys top-tier sovereign credit ratings, stable economies and highly creditor-friendly legal frameworks. Recovery rates in the event of default often exceed 80%, well above the European average of 49%.

Additionally, while traditional banks still dominate the mid-market in the Nordics, few alternative lenders have the local expertise to effectively compete. This leaves a compelling gap for specialist lenders like CORDET to deploy capital on attractive terms, while aligning closely with regional norms around transparency, governance and ESG.

Differentiation in an Expanding Market

As private credit grows, CORDET stands out through its focus on the lower mid-market and its hands-on approach to credit and portfolio management. Unlike many larger players who seek to deploy capital at scale, CORDET thrives in complexity—offering flexible, relationship-driven financing solutions supported by deep local networks and rigorous credit discipline.

Its Direct Lending Plus+ strategy delivers enhanced returns per turn of leverage—significantly above market averages—while maintaining conservative risk metrics. The ability to source and execute high-quality deals in a relatively underexplored corner of the European credit landscape sets CORDET apart.

Supporting Growth, Succession and Strategic Change

CORDET plays a critical role in supporting companies through transition—whether expansion, management buyouts, or family business succession. The firm’s value-added approach includes bespoke financial structuring, strategic advice and access to external experts to strengthen operations or governance.

Existing portfolio companies that perform well benefit from continued financial support, reinforcing long-term partnerships. These engagements drive operational improvement and long-term stability, especially during periods of change.

Looking Ahead: The Future of Private Credit and CORDET’s Priorities

CORDET expects private credit to continue evolving as investors seek yield and diversification in an environment where traditional banking plays a reduced role. In response, CORDET is doubling down on its core strengths—intensive origination, disciplined credit underwriting, ESG integration and strategic structuring.

Upcoming launch of CORDET Direct Lending III builds on the success of its previous funds, offering investors diversified access to high-conviction lower mid-market deals. With a targeted gross IRR of 12–14%, the fund reflects the firm’s confidence in its strategy and its ability to deliver consistent, superior returns.

In a shifting financial landscape, CORDET’s clarity of focus, local insight and rigorous standards position it as a partner of choice for investors seeking exposure to the resilient and rewarding Northern European lower mid-market.