Regional Guide to Europe: Benelux

The region is only just behind Europe’s three biggest markets amid sharp growth in deal volume.

In the past few years, the Benelux region has emerged as the solid fourth-place market for European private debt, with a growing deal volume placing it behind only the major markets of UK, France and Germany for deal volume.

Provisional H1 figures from advisory firm Duff & Phelps show the Benelux region accounted for 9 percent of European private debt deals in the first half of 2021, hard on the heels of Germany with 11 percent, France with 17 percent and the UK out in front with 44 percent of the market.

9
Number of Benelux-based funds in market

$5.52bn
Total amount targeted by funds in market

Jacco Brouwer, leader of the European debt advisory practice at Duff & Phelps, says: “People say that Benelux over the last few years has become more of a funds market, with funds gaining ground and lots of pan-European players hiring teams on the ground. In Benelux, the banks have historically been very strong players.”

A recent report published by Pemberton shows a steady stream of private equity deals continued in Benelux through the covid pandemic in 2020 and into the first half of 2021. Boris Harmsen, head of Pemberton’s Benelux office, is quoted as saying: “The local Dutch banks’ exposure to certain sectors – such as oil and gas and mortgages – have capital requirement implications that make it hard for them to deploy funds for cash lending. That has meant growing scope for direct lending, which has become the first choice for SMEs in the Netherlands.”

Tikehau is another pan-European lender with Benelux offices in Belgium, the Netherlands and Luxembourg. Head of private debt, Cécile Mayer-Lévi, says: “Benelux has been quite active for us this year with more unitranche deals. The competition is quite strong but we benefit from this idea that it makes sense to have a relationship approach and access to the local markets makes a big difference.”