The direct lending market finished 2020 with a bang, defying all early-year expectations when the pandemic began and debt providers became nervous about deploying. Fast forward several months, and many funds will tell you Q4 was their best-ever quarter.

Despite the wobbles of covenant problems in portfolios, some level of debt restructurings and intermittent periods of economic instability caused by recurring national lockdowns, our survey reveals that the market expects 2021 to be a good year for direct lending. Almost 70% of respondents believe deployment will increase this year.

Private debt providers are, in fact, so upbeat that 59% of respondents to our yearly survey said they expect coronavirus disruption to have only a minimal impact on their fundraising efforts in 2021, with another 32% saying they expect no, or indeed, a positive impact. This is in stark contrast to last year’s fundraising figures, when just €16 billion was raised – a 56% year-on-year drop, according to Debtwire Funds Data. But 2021 is likely to make up for lost time, with 44% of respondents expecting €20-30 billion to be raised this year, another 22% expecting €30-40 billion and a further 22% anticipating €40-50 billion.