European deal volume up 50% in Q4 2017 – report

Strong lending in the final two quarters of 2017 saw record levels of European deal activity.

European mid-market lending increased by more than half in the final quarter of 2017 according to the latest deal activity figures from Deloitte.

Figures compiled for Deloitte’s Alternative Lender Deal Tracker Q4 2017 showed a total of 103 deals in Europe in the final three months of the year, up 51 percent, while direct lending activity grew by 32 percent on an annual basis.

Deal volume only increased slightly on a quarterly basis, rising from 100 in Q317 to 103 in Q4, though is still much higher than the 82 deals and 76 deals seen in Q1 and Q2 respectively. Deal numbers have increased almost five times in five years from just 22 in Q4 2012.

Across Europe’s three largest markets; the UK, France and Germany, deal volume increased by 36 percent, 19 percent and 3 percent respectively over the whole of 2017.

Outside of the three major markets, Deloitte noted that Poland has exhibited strong growth in lending activity, with 10 large deals completed in 2017 and many smaller deals not included in Deloitte’s survey. GDP growth in Poland is ahead of much of Europe at 4.6 percent compared to 2.5 percent for the Eurozone and 1.8 percent for the UK.

While much of the Polish market is made up of smaller deals of between €1 million and €2 million, Deloitte expects some of the larger UK-based fund managers to focus more on Poland in the future as the largest economy in Eastern Europe.

With record breaking fundraising activity seen in 2017, Deloitte expects strong deal volume to continue through 2018.