KarstadtQuelle, the troubled German retail company, has begun to innovate its financing structure as hedge funds have entered the list of its creditors. Analysts speculate that such a change could precipitate the reform at Karstadt and signal the start of the long-needed restructuring at other German companies.

“This could be a sign of the future,” says Ed Eyerman, analyst at Fitch Ratings. “It could be a real driver for change.“

The retailer was able to obtain €300 million in financing that came not from German banks that traditionally accounted for the bulk of Karstadt’s financing, but from two foreign entities, Goldman Sachs and Barclays Capital.

A series of sixteen German banks including Dresdner, WestLB, HypoVereinsbank, Hessisch-Thueringische Landesbank, and Landesbank Baden-Wuerttemberg sold the retailer’s loans in a transaction organised by Goldman Sachs, after which about €300-400 million of Karstadt’s debt ended in the possession of hedge funds and investment bank proprietary desks. So far the hedge funds have been relatively passive, but they may get more active if there are any problems with restructuring.