Private Markets 360° Navigating the Evolving Landscape of European Direct Lending (with Howard Sharp, Managing Director, Co-Head of Direct Lending at Alcentra)
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Mar 31, 2025 
Howard Sharp, Chairman and Co-Head of Direct Lending at Alcentra, shares his 35 years of credit market expertise. He delves into the evolving landscape of European direct lending, emphasizing the importance of relationships with private equity sponsors. The conversation highlights investment preferences in resilient sectors like healthcare and digital transformation. Sharp also discusses the implications of changing interest rates on valuations and future mergers and acquisitions, forecasting growth opportunities in this dynamic market.
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Alcentra's Core Mid-Market Focus
- Alcentra focuses on the European core mid-market with EBITDA around 10 to 50 million euros.
- They prioritize sponsor-backed corporate M&A in established Western and Northwestern European markets.
Private Credit Target Characteristics
- Private credit targets resilient B2B businesses with predictable cash flows and diverse customer bases.
- It avoids sectors heavily influenced by uncontrollable factors like weather or commodity prices.
Rigorous Underwriting Discipline
- Diligently assess hundreds of opportunities to identify strong credits through bottom-up analysis and buy/sell side information.
- Ensure investor capital protection via robust financial covenants in loan agreements.