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Direct Lending Pipeline Picks up in H2 2023 Reversing H1 Trend; Adevinta Sets Precedent for Pricing and Terms on Large Cov-Lite Unitranche Deals

  Deal volume picks up toward year-end with multiple deals spilling into 2024; Q1 pipeline builds up as advisors distribute teasers for new processes; Pricing trends downward throughout the year bolstering PE firms’ bidding power; Jumbo unitranche reaches new heights setting deal terms precedent; Difficult year for fundraising across all private markets strategies; and M&A among direct lending funds to continue. A burgeoning deal pipeline is expected to come to fruition earlier than expected in 2024 – in stark contrast with the start of 2023. Deal activity in H2, including ongoing deals, is considerably higher than in H1 which saw 286 completed deals, according to data from Reorg Credit Cloud.   Source: Reorg Credit Cloud “The fourth quarter this year, and especially December, is very busy,” said Mattis Poetter, Partner and Co-CIO at Arcmont. “We expect it to be a good first quarter for dealmaking for both private equity and also private debt, in terms of signings, and also closings that come over from this year,” he added.   Cheaper Financing The recent revival in M&A activity has been bolstered by the availability of cheaper financing from direct lenders as displayed in the chart below. Private equity firms have used the[...]