Alternative Lender Deal Tracker
Direct Lenders on a path to disruption with gorilla deals
- A 9% increase in Alternative Lending deals compared to the previous year shows that while Direct Lenders are targeting more deals, the rate of growth is slowing. This could indicate that Direct Lenders, and to an extent the sponsors they work with, are becoming increasingly cautious.
- Fund raising continues apace with Ares raising a €6.5bn European Direct Lending fund. BlueBay are currently raising a €6bn fund, and there are rumours ICG is hot on their heels. In addition, Ares completed a £1bn refinancing for Daisy Group, the software services business, in the largest ever European direct lending deal. This strongly suggests that Direct Lenders are chasing gorilla deals to monopolise funds.
- At the current growth rate, the private debt asset class is forecast to hit $1.4bn globally by 2023. This implies the asset class would surpass real estate to become the third-largest alternative asset after hedge funds and private equity. With size comes infrastructure, and it can’t be long before we see funds adopting a bank style model, hiring syndications teams, underwriting even bigger deals and syndicating part of the debt.
- The current global economic and political environment remains at a crossroads on waiting to see the impact of the US Fed’s U-turn on raising rates, ongoing trade tensions between major trading blocks and the ongoing Brexit uncertainty.
- Annualised default rates for leveraged loans are historically low (below 1%) when compared with the 2007-2012 average of 3.5%. However, some critics say that low default rates are down to the increasingly loose covenants in the market which allow borrowers to limp on, meeting interest payments yet without breaching a covenant until it’s too late.
Our Debt Advisory team has been in active dialogue with the leading European Alternative Lenders to set up a quarterly database, which monitors the primary European deal activity involving these lenders. 67 alternative debt funds currently participate in the Deloitte Alternative Lender Deal Tracker and the results are released to interested parties on a quarterly basis in a public version of the tracker.
Debt & Capital Advisory
The Debt and Capital Advisory team is an integral part of Deloitte's Financial Advisory practice, providing independent advice and world class execution across the full spectrum of debt markets through the firm's global network.
Deloitte Alternative Lender Deal Tracker - Autumn 2018
Deloitte Alternative Lender Deal Tracker - Summer 2018
Deloitte Alternative Lender Deal Tracker - Q3 2017
Deloitte Alternative Lender Deal Tracker - Q2 2017
Deloitte Alternative Lender Deal Tracker - Q1 2017
Deloitte Alternative Lender Deal Tracker - Q4 2016
Deloitte Alternative Lender Deal Tracker - Q3 2016
Deloitte Alternative Lender Deal Tracker - Q2 2016
Deloitte Alternative Lender Deal Tracker - Q1 2016
Head of Alternative Capital Solutions