Say what you will about last year’s Covid-induced downturn in the US beginning in March. But it paled in comparison to the UK’s economic cratering. Not since the Great Frost of 1709 had that proud nation suffered such a dramatic slump. Europe, in various degrees, followed suit.

But then, like the US, Europe and the UK began to recover. Indeed, a quick review of the literature showed how similar the comebacks were. This was particularly true of the credit markets: from the initial panicky revolver draw-downs, to separating “have” borrowers from “have-nots,” to the commercial upswing and deal snap back in the fall, and the wild Big Bang of closings at year-end.

Yet we detected distinct differences as well. As our 2016 white paper entitled “A Review of European Direct Lending” highlighted, European leveraged lending has historically been dominated by the commercial banks. In part this was due to the nationalistic character of its banking system, drawing strong support by local community banks for middle market businesses.

But as was the case in the US, direct lending blossomed in Europe after the GFC as regulated lenders were discouraged from holding leveraged loans. That gave rise to a slew of direct lenders – Arcmont, Hayfin, Permira, and Tikehau, to name a few – who each built pan-European teams to source deals from private equity firms.