Alcentra’s direct lending war chest is now over $10 billion

With bankers reluctant to lend to small and medium-sized businesses in Europe after the financial crisis, direct lenders are willingly stepping into the breach.

Proof of that is the response to Alcentra’s recent European direct lending capital raise. With a minimum target size of €3 billion, the firm received €5.5 billion from institutional investors  in Europe, Middle East, US and Asia.

Alcentra targets private debt in Europe

“The direct lending strategy provides investors with access to largely pan-European private credit investment opportunities across a wide range of sectors, focusing mainly on senior debt,” Alcentra said. “The team of 28 investment and portfolio monitoring professionals aims to generate attractive, risk adjusted returns by lending to largely sponsor-owned middle market businesses.”

Prior to Alcentra’s current fund raise, BlueBay raised €6 billion in February and Ares Management raised €6.5 billion last year, all targeting opportunities in private debt.

Record haul

According to data from Preqin, European-focused private debt funds raised $11.1 billion in January-June 2019, up over 30% from the $8.5bn raised in the same period last year.

However, deployment is slow. According to Preqin, European direct lending funds are sitting on $47.6 billion of un-invested cash, or ‘dry powder.’