The Deloitte Alternative Lender Deal Tracker - autumn 2020


The Deloitte Alternative Lender Deal Tracker Autumn 2020

Direct Lenders thrive on market dislocation

The Deloitte Alternative Lender Deal Tracker covers data for the first half of 2020 an includes 140 Alternative Lending deals across Europe, which represents a 29% decrease in the number of deals from H1 2019.

Key highlights

  •  140 new deals were recorded throughout H1 2020 across the EU, representing a 29% decrease in deal flow compared to same the previous year.
  • Following a solid start of 2020 with good activity in both Belgium and the Netherlands, number of new deals has decreased 35% during H1 2020 compared to last year
  • This slowdown is driven by the impact of COVID-19 mainly on general M&A activity levels and much less of appetite to lend from the Alternative Lenders.
  • Also governments are borrowing on a grand scale to subsidise and protect domestic capacity in a way which, in normal times, would be seen as anti-competitive.
  • Those funds that were able to raise multi-billion plus funds immediately prior to the lockdown will now count themselves lucky in their timing, as this vintage might as well become one of the best performing since the last crisis.
  • In respect of lender behavior in heavily impacted companies, there is some evidence to suggest that direct lenders have more appetite to call a sponsors bluff and take the keys of an asset, relative to that of their banking counterparts.
  • Primary activity is holding up relatively well in Belgium whereby the more conservative behavior of domestic banks is weakening their dominance in the Belgian mid-market LBO lending space and promoting the direct lending offering more firmly to the forefront as could be witnessed in many processes.

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