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European non-bank deals double year-on-year

16 September 2021

Direct lending deals doubled in the first half of 2021, compared to the same period in 2020, according to Deloitte’s latest Alternative Lender Deal Tracker. The 147 deals closed in the second quarter marked a record for the research, continuing on from the frenetic start to the year which saw a revised figure of 186 deals closed in the first quarter.

2020 saw a dramatic slowdown of deal volumes, resulting in just 385 deals over the year, a quarter lower than in 2019.

Direct lenders consist of a wide range of non-bank institutions that lend directly into corporates at senior secured levels of the capital structure.

Robert Connold, head of alternative lending in debt advisory at Deloitte commented: “’All systems go’ continues to be the overarching message for 2021. Capital continues to be deployed at record rates across the private debt market, and borrower appetite for new debt remains strong. Looking ahead, we expect alternative lending to spread across Europe, with personnel on the ground actively targeting markets that have been traditionally serviced by bank lenders.”

By sector, after seeing TMT deals dominate in Q4 2020 and Q1 2021, Business Services deals surged in the second quarter to equal TMT deals in H1 2021, with both comprising 22% of the completed deals to date. Healthcare followed with 18% of total deals.

Whilst still the most active lending space in Europe, the UK debt markets held a slightly smaller share of deal flow in H1 overall at 38% compared to the first quarter, down from 41% in Q1 to 38% for H1. Meanwhile, France, Germany and the rest of Europe continued their collective post-COVID-19 recovery and increased their share of deals to 20%, 15% and 26% respectively for H1.

By deal purpose, leveraged buyout activity remained strong and comprised 44% of H1 deals, though growth capital deals in particular saw a surge in numbers, going from 6% of deals in Q1 to 13% in Q2.

Dave Sharman, a partner leading value creation services at Deloitte added: “The H1 total of 31 growth capital deals suggests borrowers are becoming increasingly willing to support organic growth opportunities for their expanding businesses. We have seen an increase in borrowers across all sectors getting themselves ‘match fit’ ahead of a refinancing event, potentially via these lenders, as long-term planning looks more feasible.”


About the research

Deloitte’s Alternative Lender Deal Tracker covers 65 major alternative lenders across Europe, covering the period up until end of June 2021.

Direct lenders provide structural flexibility across a number of terms including access to non-amortising, bullets loans and higher leverage in return for a higher yield (e.g. target margin of 6-8% over Libor.)

About Deloitte

In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.

Please see for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

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