France Takes the Lead in European Private Debt Markets

In a significant shift within the European private debt landscape, France has emerged as the leading market, surpassing the United Kingdom for the first time since records began in 2012.

According to the latest data from Deloitte's Alternative Lender Deal Tracker, France secured a record-breaking 50 private debt deals in the last quarter of 2022, edging out the UK's 42 deals and marking a pivotal change in the European debt scene. This shift occurred despite an overall downturn in deal numbers across the region, with total deals dipping to 165 in Q4 2022 from 180 in the previous quarter.

The downturn reflects broader economic challenges, yet France's market resilience highlights a strategic repositioning. French transactions now represent 28.1 percent of the total European deals in the second half of the year, showcasing a robust 31.9 percent year-on-year growth. In contrast, Germany and the UK saw declines in deal activity, with Germany registering just 24 deals in the same period.

The technology, media, and telecommunications (TMT) sector continues to dominate, spearheading the demand in both the French and UK markets. Following closely are the business and infrastructure sectors, which remain vital components of the private debt ecosystem.

Deloitte analysts are optimistic about the future, forecasting a rebound in deal activity in 2023 as economic conditions stabilize and mergers and acquisitions (M&A) pick up pace.

This dramatic change underscores a dynamic shift in the private debt market, positioning France as a key player in shaping the future of European debt strategies.

The information in this article is derived from online research and internal resources of Menara Capital Ltd.