European deal records smashed in Q3 2021

Strong demand for alternative lending and significant capital reserves contributed to the highest deal numbers seen so far.

European private debt deal numbers breached 200 during a single quarter for the first time in Q3 according to the latest figures from the Deloitte Alternative Lender Deal Tracker.

In total, Deloitte recorded 215 deals during Q3, beating the previous quarterly record of 186 transactions seen in Q1. This brings the total for 2021 so far to 549, well ahead of the previous annual record of 522 seen in 2019.

The UK remained the most active market in Europe in Q3, with 33 percent of deals, followed by France with 22 percent and Germany with 14 percent.

TMT was the most active sector and accounted for 27 percent of deals during the quarter, with business services following on 22 percent and healthcare on 19 percent.

Deloitte said the surge in dealflow during Q3 pointed to a return to pre-covid levels of confidence, with borrower appetite for alternative lending remaining strong and significant capital deployment by private debt lenders.

However, lenders have been shifting towards higher quality and safer assets in recent years by prioritising TMT, business services and healthcare investments. This has resulted in a swing of 19 percentage points towards these three industries since the beginning of 2017.