Alternative Lender Deal Tracker - Spring 2020
Direct lendersʼ first real test
The Deloitte Alternative Lender Deal Tracker provides an insightful overview of alternative lending activity across Europe, and the key trends, developments and outlook for this area.
This is the twenty-third edition of the Deloitte Alternative Lender Deal Tracker which covers data for Q4 2019. Our report covers information from 57 leading Alternative Lenders, with whom we track deals across Europe. In this edition, we report how deal value is being balanced by strong growth in deployment.
Key Findings: Spring 2020
- Alternative Lender deals have increased by 13% year on year with a total of 484 deals in 2019, an all-time record. The Direct Lenders deal count grew at the fastest pace since 2017 showing that Direct Lenders continue to capture market share. In contrast, leveraged loans declined 13% year on year, according to LCD*.
- Fundraising continues apace with $32.8bn raised in 2019 by Direct Lenders, another record compared to $27bn in 2017. The number of funds closed was relatively low at 26 indicating that the average size of funds has increased in comparison with previous years. An example of this is GSO’s* second vintage European Senior Debt Fund with total investable capital of €5.5 billion.
- Direct Lenders have reacted differently to the impact of COVID-19. While some remain bullish and are looking opportunistically at new deals others are focused on portfolio review and secondary opportunities (where many loans were trading around 80% giving a yield of c.10%, much higher than new Direct Lending deals).
- Nevertheless, we remain optimistic that Direct Lenders with their long-term capital will provide an important counter-cyclical ballast when the liquid credit markets remain closed and banks are hesitant to lend off their own balance sheets.
*Leveraged Commentary & Data (S&P data provider)
*Goodman Smith & Ostrover (A Blackstone Company)