Posted on September 1, 2023

European Market Activity

The European Market has been a hotbed of activity and change in recent times. With new market regimes, regulatory activities, the landscape is evolving rapidly. This blog post provides an overview of the current state of the European Credit Market and its potential future trajectory explained by Marlborough Partners and Pearse Partners.

We asked Marlborough Partners; ''Geographically where are Marlborough Partners seeing the most activity in the European markets presently?''

Activity in the UK has been slower than the rest of Europe given the rising core inflation, more negative inflationary outlook, and slower growth. This also coincides with a trend of decline post-Brexit where there is now less appetite for GBP. However, the UK remains one of the larger geographies, representing 13% of European sponsor-issued leveraged loan volume LTM to June this year. We expect to see an increase in contribution when macro-economic conditions improve, but also as the refinancings flow through from the 2016 to 2020 LBO vintages where the UK made up 20% of volumes on average.

Another decline in volumes can be seen in Germany, comprising 9% of the market LTM, compared to 17% last year. Although, in the mid-market, we have experienced a good level of activity as a firm.

France has been the biggest winner in the last year, with LTM volumes reaching €16.4bn or 32% of the market to June. This compares to €12.6bn or 22% of the market in 2022.

As a firm, we are very active in all three of these markets, where we have offices, with the deals from the UK, France and Germany currently making up c.70% of our mandates. Other markets where we remain busy include Spain, Italy, Benelux and the Nordics.

As for activity in Credit Recruitment, Julian at Pearse Partners highlights;

Looking beyond the UK&I business coverage, London takes the lead. However, the DACH region is emerging as the frontier for a rapidly growing market driven by Leveraged Finance, Direct Lending, and Sponsors.

The current credit recruitment landscape in the Middle East, specifically in investment banking, shows a significant push for hiring and job opportunities, this region is attracting both local and international talent in the finance industry.

You can access the full report, below.