Development of Direct Lending Markets in Europe

The direct lending market in Europe has seen growth in the number of private debt managers and the amount of debt raised, although the total debt raised was slightly down in 2020 due to the pandemic. There is still a significant amount of dry powder in Europe, indicating available capital for investments. Investor sentiment in the asset class remains positive, driven by the desire for diversification and high-risk adjusted returns. The pricing of direct lending deals has increased slightly, and private debt volumes have nearly doubled between Q3 and Q4 2020.