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Private Debt
Deal Tracker

A quarterly overview of the European Private Debt Market

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Deloitte Private Debt Deal Tracker Summer 2024 Update

Deal volumes plummet in Q1 2024 as broadly syndicated loan offerings start the year strongly
1121 private debt deals were completed in the first quarter of 2024, marking a sharp decline of 41%1 from Q4 23. Although macro conditions have appeared to stabilise and Europe anticipated positive economic growth prospects, overall M&A activity remained subdued.

Conversely, the broadly syndicated loan ("BSL") market experienced a bumper quarter with total issuance of €29.3bn in Europe, the highest level since Q2 212 . This was fuelled by a flurry of repricings hitting the market, and with arranging banks pitching aggressively to win back market share following 12-18 months of lukewarm market conditions.

Average new-issue TLB spreads decreased by 46 basis points from the previous quarter, marking the largest quarter-on-quarter decline since Q4 22. As a result, a number of private debt facilities were refinanced with BSL issuances. The volume of private debt transactions is expected to remain subdued throughout H1 24 as rampant CLO issuances (both new-issues and resets alike) look set to further bolster BSL activity.

Debt service pressure leads to lower leverage and an increased uptick in reduced-cash pay structures
The proportion of unitranche and senior debt structures remained relatively flat compared to the same period last year at 59.5% and 24.6% of total deals respectively. In contrast, there was an increase in aggregated PIK and mezzanine structures over the past year from 12 (L6M Q3 23) to 25 (L6M Q1 24). There was also a notable 0.6x reduction in leverage from LTM Q1 23 to LTM Q1 241.

France and UK remain the most active regions, but both saw a decline in deal activity in Q1
France experienced a sharp retraction in private debt deal activity, with volumes falling 57% quarter-on-quarter, leading to the country’s lowest share of total deals since Q4 21 (21%). The decline in UK activity was less pronounced, with 39 deals being completed, equivalent to a 35% share of total activity. The rest of the continent also saw a decline in terms of absolute number of deals, however, the relative proportion of deals rose in Germany (16%), Benelux (12%), and the Nordic region (8%).

TMT dominates deal activity
The TMT sector represented the highest proportion of deals (27%) with Business & Professional Services (19%) and Healthcare & Life Sciences (18%) following suit. Of the TMT deals, 43% were LBOs and 30% were bolt-on M&A deals. We expect this sector to have a strong H2 amidst expected M&A in data centres and European telecom operators, according to Deloitte’s Summer 2024 M&A Outlook. TMT, Business, Infrastructure & Professional Services, and Healthcare & Life Sciences represented 63% of all deals in Q1 24, the highest concentration in a single quarter observed since Q3 21.



1 On a like-for-like basis (i.e., by adjusting the deal count to reflect the same population of Lender respondents from the immediate prior quarter), these figures would respectively be: 111 and 41%.
2 Source: Pitchbook LCD
2 Where leverage is reported to us (c.35% of deals). Applicable to Business & Professional Services, TMT, Healthcare & Life Sciences and Financial Services deals only.

Insights into the Deloitte Private Debt Deal Tracker

Currently covers 78 private debt providers. Only UK and European deals are included in the survey.

Total deals completed
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Euro deals completed
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UK deals completed

How much funding has been raised by which Direct Lending managers?

Global

Global Direct Lending fundraising by quarter



Cumulative number of deals per country

Largest geographic markets
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Past Videos

Autumn 2023: Lenders wait in the wings for an uptick in European M&A



Andrew Cruickshank

Spring 2023: Volatility drives a slowdown in deal activity



Robert Connold

Winter 2022: Deal activity decelerates in the face of macro-economic headwinds



Robert Connold

Autumn 2022: Evolving from the Deloitte Alternative Lender Deal Tracker



Ella Ward

Autumn 2022: Welcome to the Deloitte Private Debt Deal Tracker 'PDDT'



Robert Connold

Autumn 2022: 2022 Market Trends



Andrew Cruickshank

Evolving from the Deloitte Alternative Lender Deal Tracker

In the ten years we have been tracking alternative lending, one of the most remarkable observations has been the speed at which it has grown. Since 2012 the asset class has grown in Europe from $36.2bn of AUM to $187bn today. The number of lenders we collaborate with for this publication has grown from 20 to 78. The headcount in the direct lending market has more than doubled since 2016. In the space of a decade the alternative lending market has grown to be more than just a niche subcategory of a larger fixed income/alternatives strategy, to an asset class of its own right.

In our Spring 2022 edition of the Alternative Lender Deal Tracker, we questioned whether it may be time to refresh the title of this publication given that non-bank lending makes up an estimated 80% of mid-market deals. We had to ask ourselves “Is ‘alternative lending’ really that alternative?”

Now, as we finish celebrating ten years of the Alternative Lender Deal Tracker, we are happy to announce that we are renaming our publication to the Private Debt Deal Tracker. There are many ways in which the field is still growing and developing and there is a long way to go on the road to full maturity. We look forward to delivering insights on the twists and turns along the way. Here’s to the next ten years!

Background

Our Debt Advisory team has been in active dialogue with the leading European lenders to set up a quarterly database, which monitors the primary European deal activity involving these lenders. 78 private debt funds now participate in the Deloitte Private Debt Deal Tracker and the results are released to interested parties on a quarterly basis and via a bi-annual publication.

The Deloitte Debt, Capital & Treasury Advisory team releases a full Deal Tracker publication on a twice-yearly basis with the first edition covering H1 (released in Q3) and the second edition covering H2 (released in Q1 the following year). The online interactive database on this webpage is updated on a quarterly basis.

Debt, Capital & Treasury Advisory

Debt, Capital & Treasury Advisory is an integral part of Deloitte's Financial Advisory practice, providing independent advice and world class execution across the full spectrum of debt markets through the firm's global network.

The team offers advice to clients on all aspects of dealing with debt providers, including the refinancing of debt, raising acquisition finance, and considering accessing a new debt market. Clients include public and private companies, PE houses and their investee companies, financial institutions and governments.

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Key contacts

Andrew Cruickshank

Head of Private Debt Deal Tracker


Robert Connold

Partner, UK Debt, Capital & Treasury Advisory


Jed Poole

Manager, UK Debt, Capital & Treasury Advisory


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