NEW YORK--(BUSINESS WIRE)--Reorg, the premier global provider of credit data, analytics, and intelligence, has released its European Direct Lender Rankings for the first six months of 2024. The rankings data (also known as league tables) examine and rank European direct lenders across sector, region, debt range and ESG compliance for the first six months of 2024.
Most Active Lenders
Ares secured a repeat first place spot in Reorg’s H1 ’24 European Direct Lender Rankings, completing 36 deals and holding a 7% share of the market. Eurazeo held on to second place with 26 deals (5.1% market share), while new entrant Goldman Sachs Private Credit completed the podium with 25 deals (4.9% market share). The overall wider rankings for direct lenders, which included non-corporate facilities (such as real estate), was also led by the trio, with the same deal count but with a lower market share, of 6.8%, 4.9% and 4.7%, respectively.
Goldman Sachs Private Credit was the most active lender for debt above €250 million, completing 23 deals in the first half of 2024. Ares came in second with 14 deals, while Apollo ranked third with 11 deals for the period. Eurazeo overtook Ares for deals below €250 million, narrowly taking the lead with 23 deals versus Ares’ 22 deals. Barings Private Debt kept its third place position with 16 deals.
Many lenders maintained their leading positions in H1 ’24 for regional activity. Ares, Ture Invest, and Anthilia topped the UK and Ireland (UKI), Nordic and Southern Europe regions again, while Investec Direct Lending and Pemberton joined Barings Private Debt at the top for the Benelux region. Golub replaced Eurazeo at the top of the DACH region, CVI dominated the Eastern Europe region, and Eurazeo displaced Tikehau for first place in the France region.
Ares’ dominant performance was seen in the Healthcare & Pharmaceuticals and Financial & Insurance rankings, with Eurazeo and Goldman Sachs Private Credit sharing first place in the Software-related rankings. Anthilia displaced Ares for first place in the Business Services-related rankings, while the Consumer-related rankings were fiercely competitive as Apollo, Arcmont, Ares, CVI, Equita, Eurazeo and Pemberton all reported the same deal count for H1 ’24.
Ares and Eurazeo’s form continued for ESG-compliant deals, placing first and second with 34 deals (20.7% market share) and 23 deals (14% market share), respectively. Pemberton completed the podium with 14 deals (8.5% market share).
Deal Flow
European direct lending activity for H1 ’24 totalled 358 deals, up from 326 in H1 ’23, as lower mid-market deals continued to dominate with 75.1% of the market. Rebounding from an underwhelming Q1 ’24 (147 deals), Q2 ’24 saw the highest quarterly volume over the last 18 months (211) as direct lending opportunities remain attractive to investors. The volume disparity between quarters provides optimism for the rest of the year with most direct lending deals historically closing in H2.
Buyouts (34.6%) exceeded bolt-on acquisitions (33.8%) in H1 ’24 as lenders’ appetite for larger deals has increased, potentially signalling a revival of traditional M&A. Buyouts also increased YoY (30.8% in H1 ’23) whereas bolt-on acquisitions saw a substantial YoY decrease (43.3% in H1 ’23). Refinancings remained the third most popular use of proceeds (16.5%) followed by Capex/Growth (10.1%). The UKI region remained attractive for direct lenders representing 35.8% (128 deals) of the market. France (17.6%, 63 deals) and DACH (13.7%, 49 deals) remained in second and third place respectively.
Unitranche deals maintained its dominance in 2024, making up 61.2% of the deals seen in H1. The $3.3 billion-equivalent club financed by direct lenders for Ardonagh in Q1 ’24 was not surpassed by any deal completed in Q2 ’24. The largest entry from Q2 ’24 was that of PIB Group, a clubbed deal totalling $1.5 billion-equivalent, which pipped Iris Software’s $1.45 billion-equivalent deal to take second place. Senior/Stretched deals represented the second most popular deal structure worth 22.6% (81) of the deals in H1 ’24, while Bond Notes, PIK, Mezzanine and other structures took portions of a small remainder (16.2%).
Software-related borrowers continued to account for the largest portion of direct lending activity, with 86 deals taking place in H1 ’24. Business Services-related issuers also maintained their position in second place with 53 deals, whereas Consumer-related issuers overtook Healthcare & Life Sciences issuers for third spot with 49 deals.
Average leverage multiples rebounded in Q2 ’24 from its 15-month QoQ decline to 5.06x compared with 4.83x in Q1’24. However, YoY it is still down from highs of 5.19x in Q2’23. Average margin followed a similar trend, increasing to 619 bps in Q2’24 from 603 bps in Q1’24. It also trailed its YoY highs of 687 bps in Q1’23.
ESG
ESG-related deals in Q2 ’24 showed substantial increases, representing 42% of the total transactions compared to 32% in the previous quarter. ESG-related deals in Q2 ’24 showed substantial increases, representing 42% of the total transactions compared to 32% in the previous quarter, and a YoY increase from 35.4% in Q2 ’23. Software-related, Healthcare & Life Sciences and Business Services-related firms maintained their top three positions with 36, 20 and 18 deals respectively, with Consumer-related firms placing in joint third.
About Reorg
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