Germany on course for record number of private debt deals in 2021

The German market has seen a strong recovery from the pandemic with debt funds dominating the banks.

Germany is on course to see a record number of completed LBOs in 2021, according to data from GCA Altium.

In its latest MidCapMonitor, GCA Altium found there were 60 transactions in the first half of the year, more than half the record number of 103 LBOs seen in 2017.

Debt funds accounted for the majority of financing of LBOs in Germany yet again and have now made up more than half of the market since 2019. There were a total of 36 unitranche deals by debt funds and three senior debt fund deals, while banks completed just 21 transactions.

Loans were being used to finance add-on acquisitions, accounting for 32 percent of loans issued in H1 2021, while new financings were another 32 percent. Software and technology was the most popular sector, accounting for 37 percent, while healthcare was 30 percent of transactions.

Other markets also registered strong first quarters according to the MidCapMonitor. The UK had 114 deals in H1 2021. Last year, there were only 123 UK deals completed in total and if the rate of transactions continues, 2021 will be a record year for deal volumes. As in Germany, debt funds now account for a large majority of completed transactions, making up more than 70 percent.

France also appears to be making a recovery from 2020 lows with 70 deals completed in H1 2021 compared with 87 in total for 2020. However, banks retain the bulk of market share in France, accounting for 54 percent of all deals.