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Creditflux Direct Lending 2019

On March 13th, the fifth edition of Creditflux Direct Lending, the annual meeting organized by the Acuris group – leading information player specialized in the global financial sector – was held at the venues of the London County Hall. Over 200 participants attended the speeches of 25 speakers, each of whom contributed to describing the current situation on the European market in terms of fundraising, growth opportunities and new challenges. Barbara Ellero, Partner and Head of Private Debt at Anthilia, intervened in the “Region Focus – Italy” panel, describing the Italian private debt market (main players, dry powder and capital deployment), relationships with credit institutions and traditional lenders, how managers prepare for a downturn and investors’ expectations in a growing market as challenging as the Italian one.

As per the discussions held through conference, the Eurozone is still among the most attractive markets for investors, managing to gather increasing attention also from pension funds and family offices. Managers have the increasingly difficult task of deploying the capital raised, which is why the origination and the scounting of valid opportunities have become key success factors. The delicate context in which European small and medium enterprises operate and the relatively recent affirmation of direct lending – which has not yet allowed to observe this asset class during critical phases – have led to dedicate a particular focus to the management of possible distressed situations in managers’ portfolios, to their forecasts regarding the risk of deterioration of some positions, to how this can impact on returns and to the importance of negotiating coherent requirements and covenants with the counterparties.

Other issues addressed were the use of additional leverage to meet the investors’ target returns, pursued thanks to the support of the banking system but at the same time risky given the illiquidity of the market, as well as the comparison between direct financing and syndicated loans and the characteristics of the different debt instruments. Finally, a Creditflux analysis estimates the regions with the greatest growth opportunities in 2019: the German linguistic area comes first (31%), followed by southern Europe (24%), UK and Ireland (18%), France and the Nordics (11%), Benelux (4%).