France becomes top European market for private debt – Deloitte

Falling activity in the UK and Germany enabled France to become the top market for European private debt deals for the first time.

France surpassed the UK to become Europe’s most active private debt market in Q4 2022, according to data from Deloitte.

In its latest Alternative Lender Deal Tracker update, Deloitte found that France recorded 50 deals in the final three months of last year, ahead of the 42 deals seen in the UK. This breaks the UK’s unbroken streak of being the number one market for private debt deals since Deloitte began recording activity back in Q4 2012.

This comes as deal numbers have trended downwards since peaking in Q3 2021. A total of 165 deals completed in Q4 2022, down from 180 deals in Q3 2022. The second half of the year was also lower than the first half by 14.8 percent with 345 deals in total. However, despite difficult economic conditions overall deal activity in 2022 was only slightly below that of 2021.

The French market accounted for 28.1 percent of transactions in H2. On an annual basis, French deals increased by 31.9 percent while Germany and the UK saw activity fall by 5.7 percent and 24 percent respectively. Germany saw just 24 deals in Q4 2022, though this was slightly above Q3.

TMT was the most popular sector for the third year running accounting for 22.8 percent of all deals. It is the most popular sector in the UK and France at 23.4 percent and 18 percent respectively, while business, infrastructure and professional services follows closely behind on 23 percent and 17.5 percent respectively.

Deloitte expects deal activity will begin to pick up again in 2023 as macro economic conditions stabilise and drive an increase in M&A activity.