Key trends: Direct lenders are targeting Europe as banks retrench

UK falls to second place in terms of debt transactions but the new market leader faces headwinds.

The European private debt market remains in good health despite signs of a slowdown in the second half. With banks pulling back from corporate lending, there’s a clear opportunity for private debt funds to enter markets that were previously reluctant to embrace alternative financing solutions.

“One of the biggest opportunities is that the banks are retreating at a time when there is still a big lending need,” says John Calvao, fund principal at Arrow Global, a European fund manager.