As small and mid-market companies and enterprises, otherwise known as SMEs, look to tap a more varied range of funding sources, Standard & Poor’s (S&P) continues to track the onward march of Europe’s alternative lending markets.
In its second annual league table – which details issuance of private placements that occurred in Europe last year – and accompanying report, S&P reveals that 2015 saw the European private placement (EuroPP) market and the German Schuldschein equivalent grew by a staggering 78%, to €32.8 billion up from €18.4 billion, when compared to just a year before.
In fact, S&P’s Alexandra Krief, lead analyst on the research and primary author of the report, explained that for the first time ever, the private-placement market in Europe overtook the U.S. in terms of issuance. She explains this is because of the continued trend of bank disintermediation in Europe, which has reduced the share of traditional bank lending to companies, as well as an environment of low interest rates where investors with increased liquidity are seeking the higher yield associated with smaller companies. Krief predicts that all these factors will continue to drive the market forward, meaning a more developed and institutionalised market is necessary in the years ahead.
As a result of Moorgate outreach, the news was picked up across the specialist press, by Acquisition Finance Magazine, Financial Investigator and Global Capital (paywall), while Krief gave an interview on the subject to Private Debt Investor (paywall).