- Investors have more than €50 billion of capital to deploy into secondary credit across Europe this year
- Italy, Germany and Spain are the most popular markets for investors
- Non-performing real estate is the most popular credit investment among investors
Frankfurt – July 4, 2024: More than €50 billion of capital is able to deploy into secondary credit across Europe this year from approximately 2,000 registered investors via the Debitos marketplace, a new investor intentions survey shows. This compares with €21 billion of capital to invest at the end of 2020 from 1,000 registered investors, reflecting deepening liquidity and maturity of Europe’s secondary debt universe.
The survey, conducted by Debitos, Europe’s leading secondary market for loans in Europe for banks and investors, polled 2,000 registered investors on the platform during June to assess investment appetite by geography, credit type and amount to invest. Survey respondents were invited to offer multiple answers across preferred jurisdictions and asset classes.
Italy tops rankings as most popular secondary credit market
Investment into Italy’s secondary debt markets ranks top in the Debitos Investor Intensions survey, with more than 1,225 investors, or 61%, citing the market as an investment focus. Germany came in second place, with 815 of all registered investors on Debitos platform keen to invest in Europe’s largest economy, reflecting 41% of the sample. In third place was Spain, registering 433 preferences, or 22% of the total sample. After the top three markets, investment preferences diverge broadly with the balance of the top 10 investment locations all registering interest from between 15% to 11% of the sample. In total, investors conveyed an appetite to deploy capital in 45 countries across Europe.
“Investors are attracted to markets where there is legacy distress is aligned with an improved economic outlook and a creditor-friendly legal framework,” says Timur Peters, founder and CEO of Debitos. “This explains the enduring popularity of Italy, Germany and Spain.”
Peters adds, “It is also notable just how much broader investment appetite has become. Our survey captured investors’ appetite to lend in 45 counties throughout Europe, which underlines the growing confidence in secondary credit markets and deepening liquidity. We expect activity to continue to diversify both in regions and credit types in the months and years to come.”
Chart 1: Top 10 most popular markets for secondary credit investments
Source: Debitos
Transaction diversification continues to broaden
Investors are targeting 21 different credit types and categories, according to the Debitos Investor Intensions survey. The breadth of credit transactions mirrors the evolving dynamics of debt markets, which have multiplied across a range of sector-specific transactions and corporate credit categories.
The top three most popular credit investment types are virtually equal in appeal among investors and are all secured by real estate. According to the survey, around 88% of all registered investors on the platform, want to invest in real estate credit via secondary markets on the Debitos marketplace. Investors specified real estate loans, non-performing real estate backed retail loans and non-performing real estate backed corporate loans. In fourth place, investors also identified non-performing retail receivables as an investment target.
Appetite for non-performing real estate credit reflects recent distress in the post-pandemic period, as e-commerce, technology advancements and the working from home (WFH) trend have inspired permanent changes in how and where people work, shop and relax. These trends have changed consumer behaviour which have disrupted legacy real estate sectors, prompting retailers and employers to re-evaluate their real estate footprint requirements. Acquiring underperforming loans at discounts represents attractive entry points for investors willing to bet on their ability to successfully turnaround the fortunes of the secured real estate assets.
Chart 2: Top 10 most popular credit investments types among investors
Source: Debitos
“The secondary debt market in Europe has matured enormously over the 12 years Debitos has been active,” Timur Peters added, “Investors are broadening in numbers and increasing in sophistication which helps support liquidity across the spectrum of secondary debt – from non-performing, to unsecured, bankruptcy claims and Schuldscheine. Investors’ appetite to invest in such a diverse range of credit investment increases confidence in the maturity of the secondary debt market which will help accelerate activity over time.”
About Debitos
Debitos is the leading loan transaction platform in Europe that enables banks, funds and companies to sell their credit exposures on the market through its open and transparent auction-based online transaction platform.
The platform leverages on the digitalization of the entire sale process and can reduce the expected disposal timing to 3-8 weeks compared to 3-6 months of the traditional process. Debitos was founded in Frankfurt in 2010 and has since successfully transacted more than €10 billion in 16 countries. By now, more than 2,000 investors from all over Europe have registered with Debitos.
Tags: 2024, capital, Germany, investors, Italy, Spain
Read the orginal article: https://www.debitos.com/news/investors-amass-e50-billion-in-dry-powder-to-deploy-into-secondary-credit-across-europe/
