FairFinance

FairFinance

FairFinance was founded in 2015 by Raffael Johnen, a former investment banker who recognized that German banks were structurally retreating from SME lending due to post-crisis capital requirements. The firm originated in Berlin's startup ecosystem but quickly pivoted to serving established Mittelstand companies — manufacturers, service providers, and niche industrial firms with €2–50 million in annual revenue — whose financing needs fell below the threshold that institutional direct lenders typically target. FairFinance operates a direct lending strategy spanning senior secured loans, unitranche facilities, and subordinated debt, deploying into German, Austrian, and Swiss SMEs. The firm uses proprietary credit-scoring software to pre-screen borrowers, a data advantage that cuts average underwriting time to under four weeks — roughly half the industry standard for mid-market private credit. Confirmed portfolio companies include a Bavarian industrial robotics integrator and a Saxony-based enterprise software firm, both structured as bilateral bilateral loans held to maturity. Sector concentrations include light industrials, enterprise software, and healthcare services, avoiding real estate and commodity-exposed businesses. The firm has not publicly disclosed its total AUM or deployment volume, but its team operates from Berlin with a lean structure focused exclusively on origination and credit analysis — no trading desk, no secondary market operation, no consumer-lending arm. In May 2024, Raffael Johnen spoke at the European Direct Lending Forum in London, detailing the firm's data-driven approach to sub-€10M ticket sizes, a segment he described as systematically underserved by larger credit funds (per Financial News, May 2024). FairFinance does not operate a philanthropic foundation or a co-investor club; its fundraising model is entirely institutional — pension funds, insurers, and European fund-of-funds. FairFinance's architecture is unusual because it is neither a bank nor a pure marketplace lender. Unlike LendingClub or Funding Circle, which match retail investors to loans and earn origination fees, FairFinance raises committed institutional capital into pooled direct lending vehicles and retains skin in the game through co-investment alongside its limited partners. This alignment structure — an asset manager with credit exposure, not a platform collecting a take rate — mirrors the GP/LP structure of middle-market US direct lenders like Monroe Capital, transplanted into the fragmented European mid-market.