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Update on direct lending in Europe


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Integral service around a transaction
BY : Diego GutiérrezNovember Thu, 2018

In this new publication we are going to review the latest news on the Direct Lending or "alternative finance" in Europe. This source of finance is becoming increasingly prevalent in Europe, so much so that a record €20 trillion is estimated by the end of this year.

Azora and Oquendo Capital form a real estate direct lending alliance

The fund manager Azorabased in Warsaw, and Oquendo Capitalthe Spanish private debt fund manager, are joining forces to facilitate access to alternative financing for companies in the real estate sector. Their main objective is to cover a market segment that is looking for debt alternatives to complement traditional bank financing, which remains a real handicap for many companies in the sector. Their proposed investment strategy will focus on providing flexible financing solutions for small and medium-sized real estate transactions with a moderate risk profile.

This platform will launch a first fund with 300 million euros to finance debt and all types of operations linked to real estate, as well as direct management mandates for particular operations due to their characteristics. According to the newspaper "El Confidencial"The platform will study any project from four or five million euros, both in Spain and Portugal, from the purchase of land or logistics warehouses, through the repositioning of hotel assets to subordinated debt.

BlackRock sees a record EUR 20 billion in Direct Lendind

Stephan Caron, Managing Director of BlackRockThe European Commission's "Alternative Finance for the Future" report, explained at a conference in London at the end of October, that the expected total amount of alternative finance will be close to €20 billion this year. This figure far exceeds the €16 billion of 2017 and the €5 billion of 2013.

"Growth has been particularly concentrated in Germany, where more than half of purchases in 2018 have been financed by non-bank lenders," said Caron. "Direct lending is growing in Europe with tighter regulations as the global financial crisis prompted banks to withdraw from their traditional role and leaving debt funds to fill the gap."

Trea Direct Lending invests EUR 7.5 million in the Ahimas operator

At the end of September, the agreement between the Trea Direct Lending y AhimasThe asset management firm is providing €7.5 million to the internet services operator in order to boost the territorial expansion of its business. The TDL fund, an investment fund focused on financing Spanish SMEs, has completed its fourth transaction and has already invested more than 50 % of the fund it closed in March this year, amounting to €70 million.

TREA Direct Lending provides flexible financing solutions investing mainly in senior and senior convertible loans. TDL's objective is to position itself as a reference financier of Spanish SMEs in a period of profound changes in the sector.

Antonio Muñoz, CEO of TREA, states that "the good performance of the TREA Direct Lending fund reinforces our commitment to diversify our alternative asset management offering. This operation also consolidates TDL as a reference financier for the development of the Spanish business fabric and as a flexible and agile financing solution that helps SMEs in our country to finance their expansion and business modernisation processes".

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