OurInvestment funds Direct lending is a direct form of company financing, without the intermediation of financial institutions. Its actors are investment funds, which grant loans to companies with the aim of obtaining a return on their investors' capital.
Direct lending investment funds in Spain
More and more mid-sized companies are turning to the debt markets for cheaper, faster or more aggressive financing than they would be able to obtain through traditional means from banks.
While it is true that in Spain the vast majority of SMEs, and even large companies, are mostly financed by commercial banks, unlike in the United States, more and more companies are choosing to invest in this type of fund.
These are typically funds that tend to require less collateral, allowing for greater borrowing and internal flexibility that banks are not normally able to offer due to regulatory restrictions and the impact that excessive borrowing may have on their capital requirements following the European Basel III regulations.
That is why from early 2000s debt funds have experienced a very high growth in SpainThe funds are increasingly being raised by investors due to high demand.
Even so, the amount of funds being raised is only 1% of the total being raised in Europe so it seems that there is still a lot of growth to come in the next few years, where Direct Lending is expected to establish itself as an established tool for medium sized companies or companies with high growth potential.
Leading Direct Lending investment funds in Spain
Alantra Private Debt was created in 2014 to promote various private debt funds, it currently has around 300 million under management and expects to raise more funds in the near term. With 15 transactions completed to date, Alantra Private Debt is one of the largest private debt most active private debt firms in the Spanish mid-market.
Another of the largest funds in corporate finance comes under the umbrella of Tressisone of the major players in this sector, active since 2014, which invests mainly in corporate debt focused on medium-sized companies, with a high risk profile and a long investment horizon, providing the companies that use it with great liquidity.
Finally, it is worth mentioning the expected high growth in this sector, where international companies have set their sights on entering Spain, such as the French company Tikehau or the American Muzinich.
These two giants are very active in raising funds for subsequent investment in this segment, having raised over 1.200M€ in Tikehau's latest fund issue and around 4.000M€ in the latest fund that Muzinich is raising.
What is clear is that due to the favourable conditions of liquidity and investment appetite, the sector is going to grow positively, and that the offer is going to increase in the national territory thanks to the entry of new Direct Lending investment funds.
If you’d like to find out more about direct lending investment funds in Spain, or if you’re interested in this product to finance your business, at Baker Tilly we’re here to help you find the financing that best suits the needs of your business model and growth strategy. You can also find plenty of content in our HowTo section that explains direct lending investment funds and other types of alternative financing in greater detail.