Going to the dentist is generally not something people want to spend more time doing. But I recently had the opportunity to spend a whole day at one. Not as a patient, to be fair, but as a lender. The company’s sole lender, in fact.

Clinias Dental Group, a Netherlands-based chain of dental clinics, operates standard dental practices as well as emergency facilities, orthodontic surgeries, and a fleet of 15 mobile dentistry units.

My site visit came more than a year after I first heard about the firm as a potential borrower. We had already done around five months of research on the company from afar before our loan was completed, including credit analysis to understand its operations, digging into the dynamics of the Dutch healthcare market, scrutiny of the senior management team and Bencis (Clinias’ private equity owner), as well as work to get to grips with its ESG profile. But now we needed to see it for ourselves, to learn more about its business practices and, most importantly, how it hopes to develop its approach to sustainability throughout the lifetime of Fidelity’s loan - critical to both lender and borrower. 

Open wide 

My day with Clinias began far too early with a 4am wake-up call and 6.45am flight to Amsterdam. Otto Wijn, Clinias’ COO, met us at the airport to drive us the hour or so south to the firm’s headquarters in Breda, not far from the Belgian border. This sort of welcome from a company’s senior manager wasn’t something I’d experienced before, but it gave us some extra time to get to know Otto and chat about his work a little more. 

Once we arrived at Clinias’ headquarters we had formal meetings with Otto and Jim Vermeule, Clinias’ CEO, to go over the company’s recent performance, its budget and growth plans, and to discuss how Fidelity could help it improve its ESG credentials. The loan we’ve provided to the firm is sustainability-linked, which includes a two-way margin ratchet, linked to certain ESG targets or KPIs. This means the borrower receives a discount on the interest rate it pays if it meets its KPIs, but also faces an interest rate penalty if these targets are missed. 

It's only after the loan is finalised that the margin ratchet KPIs are agreed. Starting this conversation was an important part of my reason to visit the firm’s senior management team.

Before our loan was finalised in 2023, our initial analysis had suggested that Clinias’ work with vulnerable and disadvantaged people through its mobile units made it a strong sustainable investment prospect from a social perspective. These mobile units are large trailers fitted out with the latest technology and are used to provide dentistry services to underserved populations across the country, including asylum seekers, refugees, and people with disabilities. One of the most interesting parts of my visit came late morning, when we got the opportunity to explore one of the facilities with those who designed and built it.

Seeing it for real, the unit surpassed any expectations I’d had from my prior research. The attention to detail in the design is impressive, from the electronic sliding doors to the windows, which are positioned low down so patients can see out when they’re in the dentist’s chair. The truck is spacious, well-organised, and it maximises the light to create a pleasant environment for both patients and staff.

Somehow, they’ve managed to fit a dentist room, waiting area, staff breakout zone, and spaces for cleaning and diagnostics all into one trailer . With plans to grow operations to serve elderly care facilities and schools, the tour really brought home what an asset the fleet can be to the firm. 

Drilling down

Visiting the company and seeing the mobile unit in person gave me a practical insight beyond anything we learned during our extensive preliminary research. We had previously heard how the company has strong staff engagement and good retention thanks to an incentive scheme and regular training, but this positive morale was brought to life through speaking to staff in one of the dental practices in Breda that afternoon. 

The clinic was completely different to the dentist practice I use in London. Here was a functional, clean, open-plan space with 10 examination areas off a shared common area - a far cry from my own small local dentist’s office. Seeing the staff all working together in such an inclusive environment in the Netherlands made a lasting impression.  

Getting to the root of things

Even after all of the ESG analysis, and the engagement with a company and sponsor that’s done before a deal is signed, it’s only on completion of the loan that the real work with a borrower can begin. Our collaboration with Clinias will last throughout the lifetime of the loan. There will be many more visits, and we will spend plenty of time with the company and its senior management team to implement an ESG framework and track their progress. 

Some of these future discussions could be difficult, of course. We have to make sure the company is on target to meet its goals – both financial and sustainable – but having a personal relationship now with Jim, Otto, and the rest of the team should enhance this process. 

And the conversations on visits like these don’t just present us with the opportunity to ask questions of the company – the process is two-way. Clinias’ team was able to grill us about how other names across the European healthcare services sector approach ESG. Given that we analyse the sustainability profiles of more than 4,000 companies, we’re able to give them insight to potential best practice ideas from comparable firms. 

None of this is unusual for a direct lending deal - we expect to develop close relationships with all the companies that we lend to, spending a lot of time with the firms and their management teams to get to grips with what makes the business tick. While this was my first visit to Clinias, I look forward to more regular check-ups at the dentists’.