Insights

In this brochure we aim to answer the questions most frequently asked about European direct lending.

We continue to work closely with our portfolio companies across Europe as the world moves to the next stage of the coronavirus crisis.

Government responses to coronavirus have been swift and substantial. However, European support measures announced to date are not coordinated and vary from country to country.

France is an increasingly attractive market for private debt investors thanks to a powerful mixture of structural and temporary factors.

One of a series of papers where our in country leaders examine key themes and trends important to investors and corporates in Europe.

The European macro outlook continues to be supportive for private debt.

Q1 2019 saw a broad rally across asset classes to levels last seen before the sell-off in Q4 2019.

We believe that most of the Direct Lending capital in the market over the last 12 months has been directed towards the Upper MidMarket (deals with an Enterprise Value above €500 million), where investment opportunities are readily accessible through investment banks and sponsors.

Q3 saw the ~75bp summer widening in syndicated loan markets completely reverse in the face of dwindling supply, negligible pipeline and record CLO issuance. However, recent market weakness has seen syndicated loan yields start to widen once again.

Private debt, we believe, is more attractive than other private and public asset classes on a relative value basis.

We are seeing increased competition in the upper end of private debt markets (€200m+)

Despite concerns of rising populism in Europe and further afield, strong corporate earnings and a low default environment continue to be supportive for direct lending in Europe.