The year-to-date direct lending deal count and estimated volume are running ahead of the same period in 2024, but the pace of this activity appears to have slowed as the year has progressed, with volume over the last three months (to end-October) coming in at roughly half the Q1 total.
On a historical basis, €34 billion in deal activity in the year to date is nearly three times the level tracked in 2020, according to data from PitchBook LCD’s recently published European Private Credit Monitor.
In the last three months — and similarly in Q3 — the refinancing flows between the broadly syndicated loan (BSL) and the direct lending (DL) markets are roughly similar, whereas DL provided a surge of refinancing to BSL borrowers in Q2 during volatile markets, and BSL provided cheaper refinancing to DL-financed companies in 2024 and early 2025.
Rise of the recaps
At 11% of the deal count YTD, recapitalizations have taken the greatest share since LCD began tracking this data. Refinancings have also kept lenders busy, with an 18% slice of the deals (these transactions banked a 22% share in full-year 2024).
Size profile
The proportion of deals with an estimated size between €100-349 million in 2025 is 55%, which is larger than all full-year shares for that cohort since LCD started tracking this data. Bigger deals (€1 billion-plus) are still coming to market, and the percentage in this bucket is 13% YTD, versus 21% in full-year 2024 — though it is still higher than the annual percentages tracked across 2020-2023.
Price point
Average spreads in all direct lending transactions are 100 bps tighter than they were in 2020, but 57% of buyout deals tracked by LCD have spreads between 500-600 bps.
Meanwhile, distressed situations are on the rise, with LCD counting nine situations where lenders took the keys to a business in Europe’s direct lending market in 2025 so far, compared to an average of less than two on this measure between 2018-2024.
Credit: Nikada/Getty Images
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