Private Debt in Germany

Germany is the largest economy in Europe and a major market for direct lending. It has become a focus market for private equity given its economic strength and solidity. The country boasts a wealth of well-run, mid-sized companies – increasingly in nontraditional, non-industrial sectors – and a positive attitude towards private equity as creators of operational value and growth.

As a result, the market for financing these investments keeps growing and direct lending has been increasing its share of LBO financing for years. Direct lenders’ overall market share across all transactions, senior and unitranche rose from zero in 2012 to 65% in 1H 20211. Germany is a key pillar in any pan-European direct lending strategies and has been a stronghold for Pemberton since inception.

The impact of the covid-19 pandemic on direct lending deal volumes in Germany faded quickly, and after a strong first half in 2021, market analysts expect Q4 to see strong demand.

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