Alternative Lender Deal Tracker

A quarterly overview of the European Alternative Lending Deal Market

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Q1 2022 key findings

Q1 deal volumes slide, reflecting volatile macro-economic conditions

The first quarter of 2022 saw total deal completions reach 179, representing an 5% year-on-year decline when compared with the same quarter in 2021 (189) and a 18% decline in comparison to Q4 2021 (218 completions). This decrease in deal activity is unsurprising when considering that a sluggish start to the year that was compounded by the geopolitical shock from Russia’s invasion of Ukraine. While these events froze the public debt markets, it has evidently slowed the private markets too.

France runs UK close for top spot as French deals surge in Q1

Direct lending activity in France surged in Q1 2022, nearly pipping the UK to first place when considering deal share by country. France accounted for 26% of deals closed in the quarter, just behind the UK’s 27%. UK deal share fell 3pp compared to the 30% observed in Q4 2021. Germany and the Rest of Europe saw 18% and 29% of deal activity in Q1 respectively.

Deal activity continues to concentrate across TMT, Healthcare and Business Services

Lenders have continued to prioritise quality assets within the TMT, Business, Infrastructure & Professional Services and Healthcare & Life Sciences sectors in particular, accounting for 24%, 20% and 18% of deal activity in Q1 respectively and is evidenced by a deal concentration of 62%. This is slightly lower than the 64% concentration reported in Q4 2021. In the UK alone, TMT regained the top spot for deal activity, accounting for 23% of transactions, whilst Healthcare & Life Sciences took a 19% share.

Acquisition-related financing continues to be the main impetus for direct lending

Leveraged Buyouts continue to be the main driver of deal activity, being the motivation for 41% of completed deals in Q1 2022. This represents a slight increase compared to the equivalent 36% in Q4 2021. Bolt-on M&A and Refinancing were identified as motivations for 27% and 16% of deals respectively in Q4 2021.

After a record-breaking year for the direct lending market in 2021, deal volumes have slowed as a result of a worsening macro-environment and unexpected global events. Past patterns show that in times of economic uncertainty, deal volumes in the mid-market tend to increase, however, whether 2022 will follow suit remains to be seen.


Insights into the Deloitte Alternative Lender Deal Tracker

Currently covers 82 leading Alternative Lenders. Only UK and European deals are included in the survey.

Total deals completed
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Euro deals completed
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UK deals completed

*For the purpose of the deal tracker, we classify senior only deals with pricing L + 650bps or above as unitranche. Pricing below this hurdle is classified as senior debt.

How much funding has been raised by which Direct Lending managers?

Global
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Global Direct Lending fundraising by quarter



Cumulative number of deals per country

Largest geographic markets
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