Thu 04/18/2024 15:33 PM
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Relevant Documents:
LTM Direct Lender Rankings
Asia Private Credit Report
2023 Direct Lender Rankings
EMEA Midmarket Deal Pipeline
Deal Origination Weekly

Ares secured first place in Reorg’s LTM ended March 31 European Direct Lender Rankings, completing 61 deals and holding a 6.7% share of the market. Eurazeo and Barings Private Debt placed second and third, respectively, with the former participating in 38 deals (4.2% market share) and the latter 35 deals (3.8% market share).

The overall wider rankings for direct lenders, which included noncorporate facilities such as real estate, was also led by the trio, with the same deal count but slightly lower respective market shares of 6.5% for Ares, 4% for Eurazeo and 3.7% for Barings.

Goldman Sachs Private Credit was the most active lender for total borrower debt above €250 million, completing 27 deals in the LTM ended March 31 period. Ares came in second with 22 deals and KKR Credit third with 20 deals for the period.

The top three lenders for total borrower debt below €250 million were the same as the overall European Rankings, with Ares (39 deals), Eurazeo (36 deals) and Barings Private Debt (29 deals).

Barings Private Debt, Tikehau and Ares continued their dominance by leading the LTM ended March 31 rankings in the Belgium, the Netherlands and Luxembourg, or Benelux, France, and U.K. and Ireland, or UKI, regions, respectively. Eurazeo was on top for the Germany, Austria and Switzerland, or DACH by its German-language acronym, region, while Ture Invest and Anthilia retained their positions as leaders in the Nordic and Southern Europe rankings, respectively.

The top lenders for environmental, social and corporate governance-, or ESG-, compliant deals in fiscal year 2023 were Ares with 59 (17.9%), Eurazeo with 32 (9.7%) and Barings Private Debt with 26 (7.9%) deals completed.

Deal Flow

European direct lending activity in the first quarter of 2024 fell 12.3% year over year to 142 deals from 162 deals completed in the first quarter of 2023, as the asset class faced greater competition from banks in the broadly syndicated loan, or BSL, market during the period. For the LTM ended March 31 period, a total of 690 deals were recorded, with lower-midmarket deals by far the most popular debt range, representing 78.1% of the market. Deal flow remained relatively equal in the second half of 2023, with most deals completed in the fourth quarter of 2023 (193) marginally ahead of the third quarter of 2023 (191).

Bolt-on acquisitions remained the most popular use of proceeds (40.1%), with buyouts (31.4%) and refinancings (15.7%) following. The majority of deals completed were companies based in the UKI region (222 deals), with France (145) placing second and DACH (109) third.

Unitranche deals maintained the dominant position, making up 68.2% of the deals seen in the LTM March 31 period. Most notably, the club of direct lenders that provided the $3.3 billion-equivalent unitranche for U.K.-based insurance broker Ardonagh was the largest transaction recorded in the first quarter of 2024. U.K. software solutions provider Iris Software was also among the top five largest European deals in that LTM period, with a £1.45 billion-equivalent deal signed in the first quarter of 2024.

Split by sector, software-related borrowers accounted for the largest slice of direct lending activity, with 146 deals taking place in the LTM ended March 31 period. Business services-related and healthcare and life sciences issuers ranked a close second and third, with 116 and 112 deals, respectively.

Average margin dropped substantially in the first quarter of 2024 to 590 bps from 651 bps in the preceding quarter, as direct lenders cut pricing to contend with banks pitching for the same deals. However, average leverage multiple remained largely unchanged quarter over quarter - 4.83x in the first quarter of 2024 versus the fourth quarter of 2023.


ESG-related deals in the first quarter showed its lowest numbers over the LTM ended March 31 period, accounting for 32.4% of European direct lending transactions. Software-related, healthcare and life sciences, and business services-related firms remained the three most active sectors in the ESG sector over this period, with 58, 43 and 39 deals taking place, respectively.


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