Debt transactions with alternative lenders up 6% in the second quarter of 2014
24 September 2014
- Increase of 38% in number of deals in the first half of 2014 compared to 2013
- M&A activity drives significant number of deals
Alternative non-bank lenders recorded 34 deals in the UK and Europe for the second quarter of this year, up 6% on the 32 deals in the same period of 2013. Comparing the half year gives an increase of 38% in deal volume, with 69 deals for the first half of 2014, compared to 50 in the first half of 2013. These feature in the Alternative Lender Deal Tracker* from Deloitte.
There has been a significant pick-up in the proportion of deals driven by M&A, accounting for 59% of deals in the second quarter of 2014, compared to a low point of 38% in the same period of 2013.
Fenton Burgin, head of UK debt advisory at Deloitte, comments: “The steady rise of alternative lending has prompted a response from banks over the past nine months. In the face of turbo-charged alternative lender liquidity, a small number of European banks have increased their flexibility to provide and underwrite non-amortising structures that are similar to those provided by alternative lenders. Even with this response, alternative lenders are here to stay and will continue to expand at pace.
“Importantly, we’ve seen a pick-up in alternative lending being used to support M&A activity in the mid-market, providing evidence that alternative lending is becoming more mainstream for buy-out transactions.”
Fenton Burgin concludes: “Increasing numbers of alternative lenders with large amounts of recently raised capital are looking to Europe for investment opportunities. The UK still remains the main destination for this activity, with 48% of transaction taking place here, 25% for France and 12% in Germany in the second quarter.”
Floris Hovingh, director at Deloitte UK debt advisory, adds: “The UK mid-market is now a competitive place, meaning that private debt funds increasingly need to differentiate themselves in terms of their scale, geographic capability, sector expertise and flexible terms.”
Notes to editors
*and related research
Deloitte’s Alternative Lender Deal Tracker compiles data and information on a confidential basis from over 34 subscribing, leading alternative lenders. The deal tracker covers a total of 228 transactions since Q4 2012. Deloitte tracks primary mid-market deals across Europe with up to €350m of debt. On a quarterly basis, full data is provided to all subscribers and a summary report provided to market participants highlighting key market trends and developments.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte debt advisory provides independent advice to borrowers across the full spectrum of debt markets through our global network of 140 debt professionals in 30 countries. Deloitte debt advisory is the market leader for UK mid-market alternative lender transactions, having advised on over 20 alternative lender transactions in UK since 2012.
The information contained in this press release is correct at the time of going to press.
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