Private Debt Mid-Market Lending 

The latest trends across the mid-market lending space

Are the tides starting to turn for small and medium-sized businesses? The mid-market appears ready for a soft landing after a promising start to 2024. M&A looks finally set to rebound and lenders report a bullish sentiment. Private Debt Investor’s Mid-Market Lending Report pinpoints the sectors driving the sector in 2024.




Mid-market takeaways from PDI Europe

Mid-market lending came in for scrutiny at Private Debt Investor’s Europe Summit in London, with investors raking over what defines the sector and where it needs to look next.


After defying expectations in the last two years, private debt’s most dynamic market could be expected to cool off in 2023 as the macroeconomic realities start to bite. But there’s overwhelming consensus that the current difficulties in both the banking industry and the deal market will play to the strengths of the mid-market. We consider the key trends driving the sector in 2023 and look at how fund managers are achieving double-digit returns despite the tough environment.

Mid-market lending: Private debt benefits as banks pull back

How do you characterise the state of the mid-market? There’s something of a reality check going on.

Mid-market lending trends: The return of distressed debt

Opportunistic credit funds are seeking to benefit from macro uncertainty.

Mid-market lending trends: The need to deal with inflation

Interest rate rises to tame inflationary pressures have ‘wrought havoc’ on private debt portfolios, so how are lenders reacting?

Mid-market lending trends: Why flexibility is king

Fund managers able to play across the capital structure are best placed.

Mid-market lending trends: The changing M&A market

Global deal values hit a 20-year low in January, but the picture is mixed.

Mid-market lending trends: The growth of the lower mid-market

Smaller businesses can offer outsized returns but managers need to do their homework first.

Mid-market lending trends: Sector specialism in North America

US direct lenders are seeking to gain an edge with industry knowledge.

Mid-market lending trends: The continued growth of direct lending

Direct lenders don’t seem rattled by a more challenging backdrop.

Mid-market lending trends: Emerging markets in Europe

US direct lenders are seeking to gain an edge with industry knowledge.

Mid-market lending trends: The Asian opportunity

Direct lending is continuing to gain importance in the Asia-Pacific region.

Mid-market lending trends: Committing to DE&I

Investors are seeking reassurance about diversity, equity and inclusion.

Private debt markets have defied the doubters over the past 12 months and roared ahead in terms of both dealflow and fundraising. The mid-market has proved no exception. After an exceptionally strong end to 2021 we look at whether the optimism can continue into 2022 and ask if it’s better to take a sector-specific or generalist approach in this crucial market segment.

Five trends in the mid-market

The sector had a stellar end to 2021, but macro concerns are beginning to weigh on dealflow.

Inflationary squeeze weighs on portfolios

The rising costs of labour, energy and raw materials are putting pressure on private debt funds and creating uncertainty in the mid-market.

Getting the mid-market mix right

How sector specialists are taking on the generalists as mid-market direct lending competition heats up.

The A-Z of Healthcare

The pandemic has shone a spotlight on the importance of the healthcare sector. Some of the letter choices were more obvious than others: no surprise for guessing that C stands for covid.

Technology lending rides high

Equity support from sponsors and strong growth rates shine a spotlight on opportunities for private mid-market creditors.

A-Z of Healthcare: A-E

In the first part of our A-Z, we examine ancillary healthcare, biotech, covid-19, digitisation and eldercare.

A-Z of Healthcare: F-K

The second part of our A-Z looks at financing, growth, healthtech, infectious diseases, joint ownership and KOLs.

A-Z of Healthcare: L-P

The third part of our A-Z looks at logistics, mental health, nursing homes, outcomes and pharmaceuticals.

A-Z of Healthcare: Q-U

The fourth part of our A-Z looks at quality of care, R&D, scalability, tie-ups and universal healthcare.

A-Z of Healthcare: V-Z

In the final part of our A-Z we look at visualisation, wellbeing, X-rays and diagnostics, youth services and Zoom healthcare.

Our annual Mid-Market Lending report is a valuable benchmark for how private debt is faring as we move into the second quarter. The good news is that with the European mid-market continuing to grow – one report even has it outpacing the US within a decade – everything points to another strong year for lending.

The mid-market: Back on the right track

With portfolios largely intact and banks in retreat, the mid-market private debt industry is ready to declare victory over covid.

Key trends in mid-market lending

The mid-market appears to have shaken off covid-19, with help from the disciplined approach taken by managers.

How to stand out from the crowd in the European mid-market

It's becoming more competitive, with a recent report suggesting that direct lending in Europe could dwarf the US within a decade. We suggest five ways managers can get ahead in this congested space.

China: Private debt land of opportunity?

Surprisingly little is known about the exact size of the country’s private debt market, but a widening financing gap is providing plenty of potential for fund managers in the mid-market.

Have fund managers really left the crisis behind?

The private debt deal market is picking up as confidence grows, but there still may be a long journey back to normal.

SME lenders pin hopes on growth in 2021

This year has seen small company financing dominated by state-backed schemes. But as they come to an end, fund managers can reclaim lost territory.

A global economic downturn has been anticipated for quite some time now, but no one could have foreseen the single factor that would suddenly tip markets into meltdown mode – a virus.

Covid-19 is wreaking its havoc across the world in quite spectacular style. So, amid the growing turmoil, how will the mid-market lending space stand up?

Five fast themes on the coronavirus’s impact on mid-market direct lending

Covid-19 and the fallout from a global economic downturn are set to weigh heavily on LPs’ and GPs’ minds in 2020.

Direct lending’s acid test

It is now one of the most popular subsets of the private debt universe, but covid-19 could be about to give this booming sector its toughest test yet.

Upside in a downturn

Private debt managers active in mid-market direct lending will not escape a downturn unscathed, but they can also see opportunities in slowing growth.

Debt funds on thin ice?

Increasingly borrower-friendly terms are a result of high liquidity and competition among private debt funds. But are players taking on risker propositions? Proskauer partners Alex Griffith and Faisal Ramzan share insight.

Has return on capital subdued in Asia-Pacific?

Large-cap investors saw lower returns on capital over a 10-year period. But for direct lenders, this has not necessarily been the case.


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