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76% of debt funds have increased their financing volume in the last two years
Investment Funds

76% of debt funds have increased their financing volume in the last two years

According to BDO, the average size of financing per transaction is between EUR 5 and EUR 10 million, according to 59% of the funds surveyed.
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22 JUN, 2023

By RankiaPro Europe

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76% of debt funds have increased their financing volume in the last two years as a result of the tightening of credit conditions by traditional financial institutions, according to the III Debt Fund Financing Barometer, prepared by BDO, one of the largest global professional services firms, which analyses current trends in alternative financing, investment criteria and the role that the main debt funds will play in the Spanish market in the coming years.

Regarding the average financing volume per transaction, as 59% of the funds surveyed by BDO agree, it is between five and 10 million euros, between 10 and 20 million euros for 24%, between 20 and 50 million euros for 9% and more than 50 million euros for 8%.

92% of the funds surveyed have a positive expectation regarding the national economic evolution, so Spain continues to attract investor appetite. The main macroeconomic factors with the greatest impact on the funds are, in the first place, the evolution of interest rates, according to 39% of the respondents, followed by underlying inflation and GDP, with 15% respectively.

Shift towards alternative financing

62% of the funds surveyed note that banks are approving new deals more cautiously due to the volatile macroeconomic environment marked by inflation, rising interest rates and political uncertainty.

Due to this situation, 65% of the funds perceive that companies are turning more frequently to alternative sources as a complement to banks, which is why, as BDO predicts, alternative financing will continue to grow and play a key role in the stabilisation of companies due to its flexibility and agility. In this sense, 68% of the funds perceive a narrowing of the existing differential between the costs of bank and alternative financing, due to the increase in the former.

Most attractive sectors

The funds participating in the study agree that the most attractive sectors are healthcare, with 80% preference for their ability to improve and adapt to change, followed by industrials (71%), energy and infrastructure (63%), and agri-food (62%), according to the BDO barometer.

However, the sectors least valued by the funds, due to their lower adaptability, are retail-non food, with 82% resistance, and the public sector, with 79%.

On the other hand, in view of the increase in interest rates, the reduction in investor appetite in the real estate and construction sector stands out, which has seen its attractiveness reduced to 40%, compared to the previous edition (53%).

Finally, 92% of the funds consider it essential to have a financial advisor to speed up the process of seeking financing, as it guarantees access to quality financial and qualitative information, streamlining the process and ensuring the necessary diligence in this type of transaction.

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