European Direct Lending up 34% in the third quarter
22 December 2017
- 95 non-bank deals recorded in Q3 2017 versus 71 deals last year, an increase of 34%
- 2017 set to become a record year for European direct lending fundraising with $14.7bn having been raised in the first nine months alone
Deloitte’s Alternative Lender Deal Tracker, taking data from 60 non-bank lenders, has revealed a 34% growth in European direct lending in the third quarter of this year. There were 95 non-bank deals in third quarter of 2017 compared to 71 deals in third quarter of 2016, an increase of 34%.
The UK remains the biggest direct lending market, also growing 34% during the first three quarters of 2017. There were 90 UK deals in the first three quarters of 2017 compared to 67 UK deals in the same period of last year.
Fenton Burgin, Head of UK Debt Advisory at Deloitte, comments: “In spite of political uncertainty an improved economic environment in Europe helped to bolster direct lending in the second part of this year. As optimism has grown, mid-market businesses have looked away from traditional bank loans and seen the flexible, reliable and significant advantages of using alternative sources of capital.”
Within the UK, the Business, Infrastructure & Professional Services (BIPS) industry continues to be the dominant user of alternative lending, followed by Technology, Media and Telecomms (TMT).
Meanwhile, 2017 is looking to become a record year for European direct lending fundraising. $14.7bn has been raised in the first nine months of this year alone compared to $6.2bn and $15.6bn for the full years of 2016 and 2015 respectively.
Floris Hovingh, Head of Alternative Capital Solutions at Deloitte, concludes: ”2017 will be a bumper year for direct lending fundraising after a disappointing 2016. New liquidity from mainstream institutional investors is fuelling direct lending with increasingly cheaper funds. It is in this turbulent, yet still cautiously optimistic context, that direct lending is appealing so much to mid-market businesses across Europe. These firms, while trying to keep the requirement for new equity to a minimum, are turning increasingly to alternative sources.”
Notes to editors
Deloitte’s Alternative Lender Deal Tracker compiles data and information on a confidential basis from 60 subscribing leading alternative lenders. These are primary mid-market direct lending deals across Europe. The tracker covers a total of 1188 transactions dating from the fourth quarter of 2012. 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.
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