Direct Lenders on a Path to Disruption with Gorilla Deals

Direct Lenders on a path to disruption with gorilla deals Deloitte Alternative Lender Tracker Spring 2019 Financial Advisory This issue covers data for the fourth quarter of 2018 and includes 98 Alternative Lender deals for the quarter, representing an increase of 9% in deal flow on a last 12 months basis in comparison with the previous year.

Deloitte Alternative Lender Deal Tracker editorial team

Floris Hovingh Andrew Cruickshank Shazad Khan Tim Mercorio Partner Assistant Director Manager Assistant Manager +44 (0) 20 7007 4754 +44 (0) 20 7007 0522 +44 (0) 20 3741 2051 +44 (0) 20 7007 6841 [email protected] [email protected] [email protected] [email protected] Deloitte Alternative Lender Deal Tracker Spring 2019 | Contents

Contents

Deloitte Alternative Lender Deal Tracker Introduction 02

Alternative Lender Deal Tracker Q4 2018 Deals 05

Direct Lending fundraising 12

Alternative Lending in action: Case study 24

Insights into the European Alternative Lending market 28

Deloitte Debt and Capital Advisory 39

© Deloitte Alternative Capital Solutions 01 Alternative Lender Deal Tracker Q4 2018 Data Introduction 02 Alternative LendersAlternative whomis Deloitte tracking with deals across Europe. LendingAlternative deals compared to the previous year. covers Our report 67 major in the 12 months to the end quarter of 2018, the fourth there was asolid 9%increase in editionAlternative theof Deloitte LenderIn Deal this twenty-first Tracker, that we report Introduction Tracker Deal Lender Alternative Deloitte 2019 Spring Tracker Deal Lender Alternative Deloitte impact of Brexit. In addition, the BOE cut cut BOE the addition, In Brexit. of impact the and backdrop global aweaker citing also rates, interest increase to plans own its from back pulled who (BOE), England of Bank The was trick hat the Completing March. in same the remaining decision the with China, with tension trade and growth economic global to risks citing 2.5% at ice on rates put to deciding February in Uturn a surprise made Reserve 2019, in Federal US the rises further two of guidance 2018in issued and times four rates interest increased Having year. this of remainder the through hold on stay likely will area Euro the and UK the US, the in rates interest that is now markets financial in view the unsurprisingly, and markets major the in slowing is growth that is however clear is that element One forthcoming. been not Tracker has Deal Lender Alternative the of edition previous our in for hoped had we clarity increased the resolved, be to still issues several With acrossroads. at remains environment political and economic global current The © Deloitte Alternative Capital Solutions

plenty of headroom to lower interest rates. rates. interest lower to headroom of plenty has US the 2.5% at but room, wiggle some has 0.75%, at UK, The zero. at rates interest with a downturn facing is ECB the that means it because least not worrying, is That policy. monetary tightened having even ECB the without in kicked slowdown area euro The area. euro the than adownturn counter to placed better much is US the that is sense the wars, trade ongoing its Despite circumstances. of set different avery face economies these of one each that is reality the policy, bank central of set aunified despite However, exports. and capacity increase to competitiveness vote, have not additional used businesses Leave the since weakness sterling’s despite that 1.7% were indicating higher, imports whilst exports, in a1%2018 decline marked Unexpectedly, of 2009. crisis financial the since rate growth annual recorded lowest the in 2018, in culminating growth declining of quarters consecutive four of back the on 1.7% from 1.2%, to forecast growth UK its | De loitte Alternative Lender Deal Tracker Q4 2018 Data Introduction 2018 Data Q4 Tracker Deal Lender Alternative loitte pace of US quantitative tightening is a a is tightening quantitative US of pace the stopping or Slowing ease. monetary extraordinary of period the during that is acquired unwinding QE, selling assets bank central only the is Fed the context, For assets. sells it which at pace the slowing by policy ease quietly can Fed the addition, In 416 9 completed deals ﬂow year-on-year ncrease in deal

Alternative Lender Deal Tracker Q4 2018 Data Introduction

© Deloitte Alternative Capital Solutions with an abundance of Direct Lenders providing a large part of this liquidity. It has been argued that rather than increasing systemic risk, Direct Lending funds participating in the leveraged loan market defence countercyclical a provide can against market extremes. In short, according to the Wharton School at the University of Pennsylvania, Private debt funds are structured and incentivised to provide the economy with a countercyclical source of credit, and continue to provide credit at a time when banks are pulling back, which helps to smooth the credit cycle and make economic downturns both less prolonged and less severe. Moving away from the hypothetical, one trend previously anticipated in the that is Alternative Tracker Deal Lender becoming more and more of a recurring theme in the leveraged loan market is that of an ever-increasing number of traditional syndicated loan credits now opting for the direct-lender route. As pricing continues to fall, and managers continue raising ever larger funds, it is inevitable that this form of loitte Alternative Lender Deal Tracker Q4 Data2018 Introduction | De €570bn before the financial crisis, to almost $1.2tn. For a third of the loans issued last borrowers’year, debt exceeded six times cash flow, while four-fifths of the market is now “covenant light”. This is a trend that has continued to trickle down into the Direct Lending markets, with a recent study conducted by Proskaur highlighting that 62% of private credit loansbenefitted from just a single leverage covenant (typically with30–35% headroom) Additionally, in 2018. the percentage of private credit deals with EBITDA cures in Europe doubled to 25% in the same period. That said, looking back over history, the annualised default rate for leveraged loans was 3.5% between with a 70% 2007-2012, average recovery on defaulted loans. The highest default was in November 10.45% 2009. Those data prints don’t feel as if they could trigger bloodshed in the markets, however recoveries are likely to be lower in this cycle as creditors' rights are impaired by lack of covenants. But the difference for the mid-market is that the market looks somewhat different to how it did 2007, in having fallen by 16% in the first three weeks of December. weeks first the December. of in three 16% by fallen having The FTSE 7%. up is After a dreadful end to the year, global equity global markets year, the to end After a dreadful ofFebruary,end the of As to a flying 2019. off start got in year, this far so 10% by up S&P 500 is US the index

Deloitte Alternative Lender Deal Tracker Spring2019 Leveraged finance in particular has received a lot of attention of late. Following the release of minutes from various committee meetings held by the Fed, BoE and all IMF, major broadsheets have devoted time to the topic, having recently issued warnings cautionaryand various tales guises, in in particular drawing parallels to the growth of sub-primemortgages in2006 that triggered the global financial crisis. But are the risks fully understood? The facts are unavoidable - the amount of outstanding leveraged loans tracked by S&P in the US & Europe has doubled from its peak of roughly As of the end of February, the US S&P 500 index is up so by far 10% this having year, fallen in the by first 16% three weeks of December. The FTSE is up 7%. Though respectively, these markets remain down 4.5% highs. and from 10% 2018 In the loan markets, a burst of new issuance hit the European leveraged loan market in February, with €8.7bn of volume launched in the three weeks to 22nd February, topping the issuance recorded in the whole months of both December and January. Turning to the capital markets, this negative sentiment has not affected movements in equities – merely the opposite. After a dreadful end to the global year, equity markets got off to a flying start 2019. in subtle form of monetary loosening that is available to the Fed, but not to the ECB and the BOE, who have merely stopped the net purchase of assets. Deloitte Alternative Lender Deal Tracker Spring 2019 | Deloitte Alternative Lender Deal Tracker Q4 2018 Data Introduction

finance will continue to nibble at the heels of the high yield and 4 2018 deals completed syndicated loan markets. In January, Ares Management completed a £1 billion refinancing for software services business Daisy Group, the largest debt fund deal executed in Europe, and potentially one of the largest globally. But what’s the context? In July 2018, Ares raised €6.5bn for its fourth European Direct Lending fund, exceeding its initial target of €4.5bn by ~45%. Whilst an already staggering amount of firepower (16x the average European CLO) Ares expects to have ~€10bn to deploy in total once leverage is included. Other examples of managers keen to get in on the action include BlueBay, currently in market with a €6bn raise, and ICG, also rumoured to be in market with a landmark fund.

So the private debt industry as a whole continues it’s march into the liquid syndicated market. Indeed, surveys show that the asset rane eran ter uropean class as a whole is forecast to hit $1.4 trillion globally by 2023, passing real estate in becoming the third-largest alternative Q4 headline ﬁgures (last 12 months) investment asset class after hedge funds and private equity. So where next for the private debt market? With size comes eal ount infrastructure, and it can’t be long before we see funds adopting est o urope eal ount a bank style model, hiring portfolio, investor relationship teams and potentially even restructuring expertise in case there is a downturn. eal ount

Alternative Lender Deal Tracker Q4 2018 Data Introduction Q4 2018 Tracker Alternative Deal Lender est o urope eal ount

Borrowers: Access Direct Lending to power growth Businesses rely on access to growth capital, yet due to risk appetite and stringent regulation, banks are more constrained. Bringing in alternative and flexible capital allows companies to grow, yet the market can be overwhelming with numerous complex loan options offered Floris Hovingh Chris Skinner to borrowers. Direct Lenders can offer effective rates with Partner – Head of Alternative Partner – Head of UK Capital Solutions Debt Advisory little or no equity dilution of your business, enabling Tel: +44 (0) 20 7007 4754 Tel: +44 (0) 20 7303 7937 businesses to make acquisitions, refinance bank lenders, Email: [email protected] Email: [email protected] consolidate the shareholder base, and grow activities. To read more, turn to our Direct Lending guide on page 28.

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© Deloitte Alternative Capital Solutions 05 Alternative Lender Deal Tracker Q4 2018 Deals 06 Deals done by each survey participant (Last 12 months) (Last participant survey each by done Deals Deals survey. the in included are deals European and UK Only Lenders. Alternative leading 67 covers Currently Alternative Lender Deal Tracker covers 67 lenders and areported 1753 deals Tracker Deal Lender now Alternative The 2019 Spring Tracker Deal Lender Alternative Deloitte 100 120 10 20 30 40 50 60 40 80 60 20 0 0 1 Q4 © Deloitte Alternative Capital Solutions 22 12 3 Q1 20 13 5 Q2 34 13 7 Q3 35 13 9 Q4 56 13 11 Q1 13 14 41 15 Q2 14 15 41 17 Q3 83 14 19 Q4 66 14 in the last 12 months last the in deals 10 more or completed participants Survey 21 Q1 60 15 23 Q2 68 15 25 48% Q3 75 15 27 Q4 73 15 29 | Alternative Lender Deal Tracker Q4 2018 Deals Q4 Tracker Deal Lender | Alternative Q1 63 16 in the last 12 months last the in completed 5 or more deals participants Survey 31 Q2 75 16 33 Q3 16 71 35 Q4 37 72 16 39 Q1 83 17 41 Q2 79 UK 17 43 107 Q3 17 45 113 Q4 17 47 Q1 Rest ofRest Europe 88 18 49 107 Q2 18 51 123 Q3 18 53 Q4 98 18 55 retrospectively updated for any new participants retrospectively is Tracker Deal Lender Alternative the in Data France UK 1753 1089 Total deals completed completed completed Euro deals 664 UK deals Other European Other Germany

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Cumulative number of deals per country The number of deals is increasing at different rates in variousEuropean countries. The graphs below show countries which as of 2018 Q4 have completed 5 or more deals. deal volume for Direct Lenders in Europe in Lenders Direct for volume deal The UK still leading as the main source of of source main the as leading still UK The enel Larget geograpic or arket Alternative Lender Deloitte Alternative Lender Deal Tracker Spring 2019 | Alternative Lender Deal Tracker Q4 2018 Deals

Direct Lending is growing in the main European markets

Comparison of deals for the last three years on a LTM basis for selected European countries On average, over time the number of deals is increasing with positive CAGR between 2015 and 2018 in all of the countries shown below.

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10 © Deloitte Alternative Capital Solutions Alternative Lender Deal Tracker Q4 2018 Deals 11 Sep-18 Jun-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Sep-18 Jun-18 Jun-18 Jun-18 Jun-18 Jun-18 Jun-18 Mar-18 Mar-18 Mar-18 Mar-18 Mar-18 Feb-18 Dec-18 Dec-18 Nov-18 Oct-18 Sep-18 Sep-18 Sep-18 Sep-18 Date – – – – Sponsor © Deloitte Alternative Capital Solutions ternative Lender DealTracker Q4 Deals 2018 | Al Ares Ardian HPS Apera, Idinvest Idinvest, LGT European Capital Idinvest,Barings LGT European Capital Ares Ares Ares Apollo Alcentra Alcentra Ardian Ardian Alcentra Ares Ares Ares SachsGoldman Ardian Idinvest KKR, Tikehau Capital Bluebay Managers, Debt Permira Tikehau Capital Alcentra, RBS Tikehau Capital Permira Debt Managers Ardian, EQT Barings, ICG Barings Barings, Bluebay, Bridgepoint Credit, Idinvest HPS Permira Debt Managers Bluebay, Idinvest, Barings LGT European Capital, Permira Debt Managers, Capzanine Lenders 600 500 400 300 200 Deloitte Alternative Lender Deal Tracker Spring2019 100 Unitranche in €m in Unitranche UK France UK France France France France Netherlands UK UK UK France UK Germany Denmark Netherlands UK UK Netherlands France UK France France France Italy France UK France UK Germany Norway Germany France UK Netherlands France Country

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1 1 1 rect Lending fundraising | Di 1 2 © Deloitte Alternative Capital Solutions 2 xpect, as more data comes in for to see Q4 2018, our arket(c. 100funds targeting c. $45 billion) with c. 65 European ith volumes in North America seeing a steeper fall, 32% nd North America were not repeated, in 2017 with Q4 undraising showing in 2018, that direct lending suffered more. 18 saw a step18 down in fundraising volumes in both Europe and funds making up c. $40 billion. North American funds represent the majority of those in m In Europe, initial indications are that volumes fell by c. 20%, w though nonetheless North American fundraising continues to outpace Europe overall and by did c. so 20%. in 2018 This compares fallto a c. 10% in volumes in wider private debt f e We marks volumes for 2018 rise a little over the coming few months. The outsized fourth quarter volumes seen in both Europe a underperforming in both Q3 markets. – – – – – . $90 billion remain in the market as of June 2018. ontinues, meaning that not all capital committed to the direct 20 North America compared to the record year in 2017. c Strong investor interest in separately managed accounts c lending space is easily captured. c. 200 Direct Lending funds seeking aggregate commitments of – – – – – • • • Key takeaways • • • Deloitte Alternative Lender Deal Tracker Spring2019 1 n n 1 n n e o ns o e e o ns o e n n n n n n en en Cet sse te n o et noee ort Aerica Direct Lending ndraiing arter rope Direct Lending ndraiing arter Direct Lending fundraising 14 Senior Direct Lending fund raising focused on the European market European the on focused raising fund Lending Direct Senior by which Direct Lending managers? 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Junior/Growth: How much funds have been 2019 Spring Tracker Deal Lender Alternative Deloitte n nsn on © Deloitte Alternative Capital Solutions n se on e et C enne t n | Di rect Lending fundraising Lending rect nest Ct o Ct Cet e n Ct enne tnes otse os otse et n eno Ct C e Cet n Ct n Ct o Ct C n Ct e e n C e e o et s Ct enne tnes n eno tes tes Ct e enne t C n e n Direct Lending fundraising 17 n rect Lending fundraising e | Di © Deloitte Alternative Capital Solutions n C t enne e Ct tes eno Deloitte Alternative Lender Deal Tracker Spring2019 n tnes enne s Ct s et o e e C n e e n Ctn C Ct o n n Ctn Cet e C Ct eno n et otse os tnes enne n Ctn e Cet Ct o nest n t enne C et e n se on se n nsn on n Direct Lending fundraising 18 An overview of some of the largest funds raised in the market the in raised funds largest the of some of overview An which Direct Lending managers? How much funds have been raised by 2019 Spring Tracker Deal Lender Alternative Deloitte Blackrock Global PrivateLoanFundII Barings Bain CapitalSpecialtyFinance Bain Capital ACE IV Ares Ardian PrivateDebtFundIII Ardian Direct LendingFund Alcentra Alteralia SCASICAVRAIF Alternative Lenders Capital FourStrategic LendingFund Capital Four Q217 BlueBay SeniorLoanFundIII BlueBay BlackRock EuropeanMiddleMarketPrivate DebtFundI Global PrivateLoanFundI Bain CapitalDirectLending2015(Unlevered) ACE III Axa PrivateDebtFundII European DirectLendingFund Alteralia SCASICAR BlueBay SeniorLoanFundI Alantra Bain CapitalDirectLending2015(Levered) ACE II Direct LendingFund BlueBay DirectLendingFundII Bain CapitalMiddleMarketCredit2014 ACE I BlueBay DirectLending FundI Bain CapitalMiddleMarketCredit2010 © Deloitte Alternative Capital Solutions | Di Q3 17Q3 Q4 16 Q2 18 15Q3 Q1 17 18Q3 Date Q3 15Q3 Q1 19 Q2 16 Q4 15 Q2 16 Q2 10 14 Q4 16 Q4 Q3 17Q3 Q1 15 13Q3 12 Q4 Q4 15 Q4 13 Q4 07 Q4 Q2 13 Q2 10 rect Lending fundraising Lending rect Size (m) w/o leverage Size $1,300 €1,406 €6,500 €2,026 €2,100 €139 €135 €135 €6,000 €602 $777 €56 €2,536 €1,529 €850 €139 €2,900 €433 €911 €278 €2,100 €1,554 €1,554 €311 €810 €810 €1,017 Investment Strategy Senior and Junior and Senior Senior Senior Junior and Senior Junior and Senior Senior Junior Junior and Senior Senior Senior and Junior and Senior Junior Junior and Senior Junior and Senior Junior and Senior Senior Senior Senior Junior Junior and Senior Junior and Senior Senior andJunior Junior Senior Senior and Junior Junior and Senior Junior Global Global Europe Europe Europe Europe Europe Europe Europe Geography Global Global Europe Europe Europe Europe Europe Global Europe Europe Europe Global Europe Europe Global Direct Lending fundraising 19 Europe Europe Global Europe Europe Global Global Europe Europe Global Europe Europe Europe Europe Global Global Europe Europe Europe Europe Europe Europe Global Europe Europe Europe Geography Europe Europe Global Europe Europe Europe Global Europe Europe Europe Europe Europe rect Lending fundraising | Di © Deloitte Alternative Capital Solutions Senior and Junior Junior Senior and Junior Senior Senior and Junior Junior Senior Senior Junior Junior Senior Junior Senior Junior Senior Senior Senior Junior Senior Senior Junior Junior Senior Junior Senior and Junior Senior Senior and Junior Senior Senior Junior Junior Senior and Junior Junior Investment Strategy Investment €203 $2,100 €325 €1,100 €700 $4,400 €1,700 €345 €640 $4,000 €3,100 €3,000 €70 €695 $1,964 €122 €2,000 $6,600 €3,000 €400 €60 €815 €530 $6,500 €215 €3,500 €750 $4,500 €5,200 €200 €850 €122 Size leverage w/o (m) Deloitte Alternative Lender Deal Tracker Spring2019 Q1 05Q1 Q1 08Q1 Q3 07 Q2 10 10 Q2 Q3 12 Q3 12 Q1 13 Q1 13 Q2 Q3 15 Q3 15 Q1 09Q1 12 Q1 13 Q2 Q1 15 Q3 15 Q1 14 Q1 Q4 15 15 Q1 14 Q1 Q4 16 Q3 15 Q1 18 Q1 13 Q1 Q1 13 13 Q1 Q3 17 Q4 17 Q4 18 16 Q2 Q4 16 Q3 18 17 Q1 Q1 18 Q1 18 Q1 Date Q4 13 Capzanine 1 Mezzanine Partners Fund I Capzanine 2 Highbridge Speciality Loan Fund II Capzanine 3 Mezzanine Partners Fund II Senior Debt Partners I Artemid Senior Loan EMZ 6 Capital Opportunities Fund I Highbridge Speciality Loan Fund III ICG Europe Fund VI Artemid CA EMZ 7 European Senior Debt Fund Harbert European Growth Capital Fund I Direct Lending Fund I Mezzanine Partners Fund III Senior Debt Partners II Artemid Senior Loan 2 Dutch Mezzanine Fund I ICG Senior Debt Partners III H.I.G. Whitehorse Loan Fund III Partners Investment HPS Speciality Loan Fund 2016 Direct Lending Fund II HIG Harbert European Growth Capital Harbert European Growth Capital Fund II SCSp Hayfin Capital Opportunities Fund II EQT EQT Mid Marker Credit GSO EMZ EMZ 8 Dutch Mezzanine Dutch Mezzanine Fund II Capzanine 4 Private Debt Alternative Lenders Alternative Leverage Finance Fund Capital Four Nordic Capzanine Direct Lending fundraising 20 2019 Spring Tracker Deal Lender Alternative Deloitte MCP III MCP Metric Fund Debt Private Capital European LGT III”) L.P. (“KKRLP III Partners Lending KKR KKR IV Opportunities Credit Kartesia Kartesia III Fund Indigo Capital III Fund Credit European Capital Incus Incus Capital Idinvest SeniorDebt5 Idinvest V Fund Europe ICG Alternative Lenders Muzinich Pan-European PrivateDebtFund Muzinich & Co. II Partners Mezzanine Partners Mezzanine MCP II MCP Debt SME UK Europe Partners Lending Fund III Opportunities Credit Kartesia IV Fund II Fund Credit Iberia Capital Incus Idinvest PrivateDebtIV Mezzanine Partners I MCP I MCP II Partners Lending Fund V Fund I Fund Credit Iberia Capital Incus Idinvest DetteSenior4 Fund Lending Partners I Partners Lending Fund VI Fund Idinvest DetteSenior3 Idinvest DetteSenior2 Idinvest PrivateDebtIII Idinvest PrivateValueEuropeII Idinvest DetteSenior Idinvest PrivateValueEurope Idinvest PrivateDebt © Deloitte Alternative Capital Solutions | Di Q1 17 Q1 15 Q4 18 Q4 17 Q3 00 Q2 18 Q1 19 Q1 13 Date Q1 19 Q1 17 Q2 14 14Q3 Q1 16 Q1 15 Q3 03 16Q3 Q2 18 Q1 14 Q1 13 Q2 15 Q3 07 12 Q4 Q4 16 Q4 12 Q4 Q3 14 Q3 15 Q3 14 Q1 14 Q4 13 Q1 13 Q2 12 Q3 07 rect Lending fundraising Lending rect Size (m) w/o leverage Size €860 €860 €474 $1,498 €870 €100 €500 €150 €2,500 € 707 €65 €475 €475 €100 $850 €508 €200 €270 €715 €65 €225 €225 $1,336 €220 €128 €300 $460 $460 €320 €530 €400 €400 €50 €280 €65 €290 Investment Strategy Special Situations Situations Special Junior and Senior Senior Senior andJunior Junior Junior and Senior Senior Junior Senior and Junior Junior and Senior Junior Special Situations Situations Special Junior and Senior Senior andJunior Senior andJunior Junior Junior and Senior Senior andJunior Junior Special Situations Situations Special Senior andJunior Junior Junior and Senior Senior Senior and Junior Junior and Senior Junior Senior Senior Senior andJunior Junior Senior Junior Senior andJunior Europe Europe Global Europe Europe Europe Europe Europe Europe Europe Geography Europe Europe Europe Europe Europe Europe Europe Europe Europe Global Europe Europe Europe Global Europe Europe Europe Europe Europe Europe Europe Europe Direct Lending fundraising 21 Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Geography Europe Europe Global Europe Europe Europe Europe Europe Europe Europe Europe Global Europe rect Lending fundraising | Di © Deloitte Alternative Capital Solutions Senior Senior Senior and Junior Senior Senior and Junior Senior and Junior Senior and Junior Senior and Junior Senior and Junior Senior Senior and Junior Senior and Junior Senior and Junior Senior & Junior Senior and Junior Senior and Junior Junior Senior Senior and Junior Junior Senior and Junior Junior Junior Senior Junior Senior Senior Senior and Junior Junior Investment Strategy Investment €355 €134 €230 €19 €290 €290 €610 € 200 €216 €615 € 268 €800 €835 €655 €205 € 104 €157 €1,140 €1,700 €1,692 €1,300 €415 €100 €270 CHF137 €212 € 153 $1,400 €200 Size leverage w/o (m) Deloitte Alternative Lender Deal Tracker Spring2019 Q4 13 Q4 13 Q2 14 14 Q2 Q3 15 Q3 15 Q3 15 Q3 15 Q3 16 Q4 15 Q3 09 17 Q2 Q4 16 Q3 15 Q3 15 11 Q2 18 Q1 Q4 17 Q1 17 17 Q1 Q3 14 Q4 16 16 Q1 17 Q1 18 Q1 Q4 16 17 Q2 17 Q1 Q4 14 14 Q2 Date Q3 17 Q4 17 Q4 17 Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Muzinich UK Private Debt Fund Muzinich UK Private Debt Proventus Capital Partners I Fund 7 Muzinich Italian Private Debt Fund Muzinich Italian Permira Credit Solutions II Permira Credit Solutions II Proventus Capital Partners II/IIB Five Arrows Direct Lending Fund 8 Muzinich Iberian Private Debt Fund Muzinich Iberian Oquendo II SCA SICAR Swiss SME Credit Fund I Tikehau Fund 9 Siparex Skandinaviska Kreditfonden AB Scandinavian Credit Fund I AB Tavis Capital Five Arrows Credit Solutions Siparex Rothschild/Five Arrows Pricoa Capital Partners V Proventus Proventus Capital Partners III Permira Permira Credit Solutions III Pricoa Pemberton Fund European Mid-Market Debt Northleaf Private Credit Oquendo Capital Oquendo III SCA SICAR Northleaf Alternative Lenders Alternative Private Debt Fund Muzinich French Recent Moves 22 level, net movement was -4, down from a net increase of 9 in 2017. 9in of increase anet from down -4, was movement net level, 2017. 1in just Senior- from the up at hires However, 10of Mid-level 41, 27 to 2017. of in increase anet compared increase an was There with level, Junior the at were movers net of majority The seniority. of levels different at IPs of movement net the shows 1(below) Figure 2017 in 2016, and respectively. observed increase 8% c. and 9% c. the to contrast in is This headcount. in 10% ac. increase represents 2017. of end the at 475 IPs This with compared (IPs) Professionals Investment 522 of atotal was there Q4 of end the At expand. to continued market (DL) Lending Direct 2018, European In the Market Headcount Lending Direct – Key and statistics recent moves Direct Lending Professionals 2019 Spring Tracker Deal Lender Alternative Deloitte level constitutes 6-10 years’ experience, and senior is those with more than 10 years’ experience. 10 years’ than more with those is senior and mid- experience, experience, 6-10 years’ relevant constitutes 6years’ than level less with those are IPs junior-level seniority, analysing When market. the in is placement private activity main corporate whose teams excluded also have We equity. investment majority or their of much that minority in is basis now the on ICG, at teams Equity have We Mezzanine/Minority the Capital). excluded Crescent Square, Park as (such funds Lending c. at /Direct headcounts Mezzanine team combined 35 investment total the included have we analysis this of purposes the For Notes between Q4 217 and Q4 21 Q4 and 217 Q4 between seniority of levels different across moves net comparing 1. Graph Figure Total headcount © Deloitte Alternative Capital Solutions 217 net oes no ee net oes ee net oes eno ee | Re cent Moves Moves cent Total headcount 21 respectively). At the Senior level the greatest intake was from from was intake greatest the level Senior the At respectively). 54% and (57% Banking Investment from come have hires Mid-level and Junior of majority the shows 3(opposite) 2018,In Figure Source of Hires – Breakdown capabilities. execution bolster to order in level Junior the toward shifted increasingly seems focus hiring The additions. strategic than rather replacements to be tend level this at hires why explain to helps funds, key most at present already are IPs Senior that fact the with 2018, in coupled entrants new of Alack down. top the from teams build to tend strategies new into expanding Firms 27 14. to from fell hires Senior of number the whilst 58, to 46 from increased hires Junior of number 2018 in that the observed have we However, years. both in levels seniority the across steady relatively remained has departures of number The 2(above). Figure in displayed are market DL the in 2017 2018 across and observed departures and Total hires Hiring Trends by Seniority levels of seniority between 217 and 21 and 217 between seniority of levels different across departures and hires total the comparing Graph 2. Figure no 217

eno eno 21 eno Recent Moves 23 ecent Moves | R

© Deloitte Alternative Capital Solutions Andrew Perry, Perry, Andrew Managing Director [email protected] Bruce Lock Bruce Managing Director [email protected] Eric Hensen, Investment Manager, joins from Deutsche Bank StuartTPG from joins Hawkins, Director, Paul Mahon, Vice President, joins from UBS Joe Buckley, Director, joins from Hermes Laura Repko, Associate Director, joins from Deutsche Bank Liam Jacobs, Director, joins fromArdian Private Debt Florent Trichet, Head of Private Debt (France), joins from Hayfin Vanni Zanchi,Vice President, joins from MuzinichCo. & (Italy) Matthieu Lagree, RBS from President, Vice joins Marc-Antoine Allen, Senior Associate, left for Sagard Holdings Paulo Merino, Senior Associate, joins from Deutsche Bank Alvaro Ruiz Nolasco, Director, joins from Santander Marlof Tjaden, Director, joins from Anjuna Capital Alcentra from joins Ordynans,Patrick Executive Director, Maria van der Veer, Director, joins internally from Loans team Matteo Masi, Director, left TBC Jerry Wilson, Principal, left Markus Geiger, Head of DACH, left for ODDO BHF Javier Castillo Perez-Auba, Associate Director, joins from Muzinich & Co. (Spain) Bart Schenk, Investment Director, joins from Eurofins Arturo Melero, Director, left for Oquendo Capital Pierre Toussaint, Director, joins from Scor Investment Partners Deloitte Alternative Lender Deal Tracker Spring2019

Ardian Ares Management Barings Capital Beechbrook Blackrock Blackrock,Paris Asset BlueBay Management CDPQ CPPIB CPPIB CVC ArrowsFive ESSGGoldman Hermes Investment Management WhitehorseHIG WhitehorseHIG Kartesia Kartesia InvestmentsPSP Capital,Tikehau CPPIB from joins Fradette, Manager, Mathieu Brussels Capital,Tikehau Madrid Capital,Tikehau Paris Ardian

Recent NotableDirect LendingMoves 20 nest

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e Bruce and Andrew are co-Managing Partners of Paragon Search Partners, Paragon Search Partners a London based searchfirm focused on the global credit markets, leveraged and acquisition finance, investment banking and private equity. Office telephone number +44 (0) 20 7717 5000 Figure 3. Charts comparing the source of hires intothe DL market between 2017 and 2018 at diﬀerent levels of seniority Figure 4. Chart comparing hires by gender gender. Withgender. firms making a concerted effort in order to improve gender diversity, the total number of female hires made in the DL market has increased to 20%. from 16% Figure 4 (b competitor DL funds (64%) with the remainder coming from Out of the Investment Market (14%), Banking and Debt Advisory(14%) (7%). Alternative Lending in action: Case study 24 Case study action: in Lending Alternative 2019 Spring Tracker Deal Lender Alternative Deloitte © Deloitte Alternative Capital Solutions | Al ternative Lending in action: Case study Case action: in Lending ternative Alternative Lending in action: Case study 25

ternative Lending in action: Case study | Al © Deloitte Alternative Capital Solutions The company then turned to the international debt capital markets, however with mixed results. complexity the given progress “We slow making were to the transaction and came to the conclusion that we professional advisors theneeded In London. from face of a looming exclusivity deadline, we turned to Deloitte’s Alternative Capital Solutions (ACS)team transactions.” complex in specialises which Chimcomplex appointed the joint Deloitte UK and Deloitte Romania team who in mid-2018, were able to field an experienced cross-border team at short notice to adequately staff the engagement from both the London and Bucharest offices. Deloitte subsequently ran a competitive debt raising process with international banks and direct lenders. fully To debt fund the acquisition, Chimcomplex then selected VTB Bank (Europe) and Credit Suisse Special Investments Group, who provided senior and mezzanine facilities respectively,based on the competitiveness of their offer and their ability to deliver within a short time period.

Deloitte Alternative Lender Deal Tracker Spring2019 “This asset already had a history in the local

both the London and Bucharest offices. Bucharest and London the both Chimcomplex appointed the joint Deloitte UK and UK Deloitte joint the appointed Chimcomplex able were who mid-2018, in team Romania Deloitte shortat team cross-border an experienced field to from staffengagement the adequately to notice “This transaction once-in-a-lifetime an was opportunity re-unite two these linked intrinsically to Romania’s rejuvenate businesses thereby and jobs." 1,000 local saving over and sector chemical finance To the transaction, the company initially struggled to raise debt in the local market. As Mr Vuza explains: market and given the limited risk appetite from the Romanian banks, we decided that a local bank deal option.” an not was Chimcomplex and its main shareholder, Mr Stefan Vuza, have for some time had their sights on acquiring their nearest competitor, Oltchim, in reverse a takeover which would more than triple the combined EBITDA. The two businesses had been designed to operate together during the Communist era but were separated during the privatisation process that followed the fall of the Ceaușescu regime. After earlier attempts following Oltchim’s insolvency Mr Vuza in has 2013, finally realised his ambition of creating the market leading caustic soda producer in Romania. Mr Vuza commented:

chemical industry Flexible capital secures future of Romanian Romanian of future secures capital Flexible Stefan VuzaStefan Chimcomplex CEO President and Alternative Lending in action: Case study 26 2019 Spring Tracker Deal Lender Alternative Deloitte team and is a new start for a whole industry here in Romania” in here industry awhole for start anew is and team achievement for our development, is an extraordinary company’s our in milestone important an marks assets Oltchim’s of successful “Our completion of the acquisition concludes: Vuza Mr team. Solutions Capital Alternative Deloitte’s of Head timeshort period minimizing execution risk.” a in deliver to able were and company the to terms commercial best the offered Suisse Credit and VTB club. lender international an with go to decided Company the needed, funds the of size sheer the and clock ticking the transaction, the of complexity the “Given which are chemicals with multiple industry applications. industry multiple with chemicals are which soda), (lye/caustic hydroxide sodium and chlorine produce to used technology the is It chloride. sodium of electrolysis the for process industrial an process, Chlor-Alkali the to relates primarily method production Company's The (“AeRO”). Exchange Stock Bucharest the of segment alternative the on listed is company Today the shareholder. main the becoming Vuza Stefan entrepreneur by led group SCR the with privatised, was business the 2003 In 1954. in state the by founded in Romania, products chemical of manufacturers leading the of one is Chimcomplex Chimcomplex SA © Deloitte Alternative Capital Solutions says Floris Hovingh, Hovingh, Floris says | Al ternative Lending in action: Case study Case action: in Lending ternative . Alternative Lending in action: Case study 27

t of (minority) shareholders ou ‑ ternative Lending in action: Case study | Al © Deloitte Alternative Capital Solutions Increase leverage for acquisitions/ dividends Enable an exit of bank lenders Reduce equity contribution and enable more flexible structures Enable growth of private companies Enable growth opportunities Enable buy Enable a liquidity event with less/no cash equity Advantages

Deloitte Alternative Lender Deal Tracker Spring2019

acquisitions on ‑ To refinanceTo bank lenders in Raising junior HoldCo debt Special dividend to shareholders structures over-levered Consolidation of shareholder base bolt Growth capital Corporates making transformational/ making Corporates Private Equity acquisitions

7 6 5 4 3 2 1 When to use Alternative Debt? use to When Situations Insights into the European Alternative Lending market 28 Alternative Lending market Lending Alternative Insights into the European 2019 Spring Tracker Deal Lender Alternative Deloitte © Deloitte Alternative Capital Solutions | In sights into the European Alternative Lending market Lending Alternative European the into sights

Insights into the European Alternative Lending market 29 Speed of execution ctive effe ‑ simplicity

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Scale © Deloitte Alternative Capital Solutions nds arenot able to provide clearing nds will target a higher yield for the Fu ancillaries. facilitiesand Fu increased flexibility provided. Greater • • flexibility structural • • However sights into the European Alternative Lending market | In nk institutions with different institutions withnk different ba ‑ al teams of funds will continue to ility to provide more structural tentially larger hold sizes for leveraged cess to debt across the capital cess to non amortising, bullet creased speed of execution, short structure via senior, second lien, unitranche, mezzanine and quasi equity. credit processes and access to decision makers. Po De monitor the asset over the life of the loan. Ac structures. Ab flexibility(covenants, headroom, cash sweep, dividends, portability, etc.). Ac In loans (€30m up to €300m). • • • • • • • • • • • • Key differences to bank lenders? Deloitte Alternative Lender Deal Tracker Spring2019 ar investment period and a 10 year

vestment professionals. Most of the 5 ye in ‑

‑ Over the last three years a significant number of new funds has been raised in Europe. Increased supply of Alternative Lender capital has helped to increase the flexibility and optionality for borrowers. life withextensions options. The limited partners in the debt funds are typically insurance, pension, private wealth, banks or sovereign wealth funds. funds have structures comparable to those seen in the private equity industry with a 3 These institutions range from larger asset managersdiversifying into alternative debt tosmaller funds newly set up by ex Alternative Lenders consist of a wide range of non of range a wide of consist Alternative Lenders Who are the Alternative Lenders and why are they becoming more relevant?

strategies including private debt, mezzanine, opportunity mezzanine, debt, private distressed debt. and including strategies Alternative guide Lender ‘101’ Insights into the European Alternative Lending market 30 • • • base investor Key of the characteristics credit of a Pansupportive documentation template by the Loan Market in (LMA) 2015 early Association is of Euromajority PPs are currently unlisted. The introduction of a standardised up significantly. amendmentAfter the thein insurance legislation in July 2013, the Since inception its in July 2012, the Euro Private Placement (Euro PP) volumes picked a glance at corporates mid‑cap for PP Euro Euro Private Placement ‘101’ guide 2019 Spring Tracker Deal Lender Alternative Deloitte • • • and asset managers asset and usually sponsor 3.5x), max. leverage (net profile credit good exposure, business international Ta Bu Ma rget lending: European mid lending: rget y and Hold strategy Hold y and inly French insurers, pension funds funds pension insurers, French inly © Deloitte Alternative Capital Solutions ‑ le ss ‑ ‑ ca Eu p size, p size, ropean roll • • • • • • • • • • Main features of Euro PP Euro of features Main • • • • • • • • • • • • | In 3% and 4.5% – No upfront fees upfront –No 4.5% 3% and to issue disclosure) (no financial confidentiality and transaction secured) are banks if guarantees include liquidity no bond and no trading listing, technical If listed: Eu Lo Li Bu Ma Fi Pa Mi r No Us Lo mited number of lenders for each each for lenders of number mited xed coupon on average between between average on coupon xed nimum issue amount: €10m amount: issue nimum cal jurisdiction, local language local jurisdiction, cal an or bond (listed or non or (listed bond or an ri passu with other banking facilities banking other with passu ri ro PPs take on average 8 weeks 8 weeks average on take PPs ro ually Senior, unsecured (possibility to to (possibility unsecured Senior, ually llet repayment profile repayment llet sights into the European Alternative Lending market Lending Alternative European the into sights turity >7 years turity ating ‑ ou t of this alternative source of financing. ‑ li sted) – sted)

Pros and Cons of Euro PP Euro of Cons and Pros Minimum credit profile; leverage profile; credit Minimum €10m amount Minimum Make purpose corporate General the to adapted and flexibility Covenant financial public (no Confidentiality for lenders of number limited Very funding of sources of Diversification (free repayment Bullet maturity Long r < 3.5x business disclosure) each transaction (bank disintermediation) epayment ‑ whole clause in case of early early of case in clause whole ‑ up c up ash flow)

Insights into the European Alternative Lending market 31 te nstent nstent Cash ﬂow debt products e eie n e e e n e de d aaiae neen ade neenand anieade CCC © Deloitte Alternative Capital Solutions eetoee sights into the European Alternative Lending market | In e ons et enes Cet sCet Deloitte Alternative Lender Deal Tracker Spring2019 te eents eno n ons te nte nestent e ons

cash flow debt products? debt flow cash How do Direct Lenders compare to other other to compare Lenders Direct do How et se et Insights into the European Alternative Lending market 32 raising senior risk strategies funds with lower hurdle rates. lower with funds strategies risk senior raising increasingly are Lenders However, Direct market. debt private the of part deepest the is which unitranche, vanilla’ ‘plain of strategy popular most the in involved mostly are and L+550bps margin above are which rates hurdle have Lenders Direct the of Majority equity. private by owned companies mainly to structures debt senior providing range margin 600bps to 350bps the in operate banks loan Leveraged lenders? bank How do Alternative Lenders compete with 2019 Spring Tracker Deal Lender Alternative Deloitte Margin 6 © Deloitte Alternative Capital Solutions n Alternative es Lenders | In ntne sights into the European Alternative Lending market Lending Alternative European the into sights proﬁle Risk economy and excess liquidity in the system. the in liquidity excess and economy the in improvements of a result as 3 years last the over down come has curve return risk the class asset other any to Similar capital. growth or debt 1 is a higher (real or perceived) risk associated with this investment. this with associated risk perceived) or (real a higher is there a result as and difficulty financial another or restructuring a financial to strategies, including: ‘Story credit’ including: ‘Story strategies, debt private yielding higher on focus funds Lending Direct Other ‘Story Credit’ – unitranche facility for a company that historically was subject subject was historically that a company for facility –unitranche Credit’ ‘Story ntne o nontne et to et to Banks 1 unitranche and subordinated subordinated and unitranche ot t ot o no et e te Insights into the European Alternative Lending market 33

rket with either ma ‑ rket Direct Lending landscape: ma ‑ © Deloitte Alternative Capital Solutions p Private Placements sights into the European Alternative Lending market ca ‑ | In Mid debt senior Traditional Unitranche ’Story credit’ unitranche (mezzanine/PIK) Subordinated Growth capital Structured equity 1 2 3 4 5 6 7 a niche strategy (mainly new entrants) or a broad suite of Direct Lending products to cater for a range of financing needs. The latter is mostly the approach of large asset managers. capital to target this part of the market. Direct Lenders approach the mid There is a limited number of Alternative Lenders operating to L+600bps in pricing the L+450bps territory. A number of large funds are now actively raising We haveWe identified seven distinctive private debt strategies in the mid 1 4 3 2 Deloitte Alternative Lender Deal Tracker Spring2019 7 6 5 Debt size Debt nitrance idcap private placeent Stor credit nitrance Traditional enior det t nn otons o t nn otons o eanine oldco rot capital it Strctred

ote stesse sttees e ee o ts oee Margin

What are the private debt strategies? debt private the are What Insights into the European Alternative Lending market 34 the investment. the interest Carried return (alsoPreferred hurdle rate) fee Management strategy comparestrategy to other strategies? How does the Direct Lending investment 2019 Spring Tracker Deal Lender Alternative Deloitte Distressed Mezzanine opportunities lending/credit Specialty lending senior Direct Fund strategy © Deloitte Alternative Capital Solutions – a share of profits above the preferred return rate that the fund manager receives as compensation which is based on the performance of of performance the on based is which compensation as receives manager fund the that rate return preferred the above profits of –a share – an annual payment made by the limited partners in the fund to the fund’s manager to cover the operational expenses. operational the cover to manager fund’s the to fund the in partners limited the by made payment annual –an debt Includes distressed undervalued securities stressed and distressed, in Invest instruments other subordinated debt and loans mezzanine invest inPrimarily structure capital the of levels senior on focused Typically situations complex in and/or structure capital the across investments Opportunistic capital structure capital the of levels senior at credit corporate into directly Invest Description ‑ for ‑ con trol – a minimum annual return that the limited partners are entitled to before the fund manager starts receiving carried interest. carried receiving starts manager fund the before to entitled are partners limited the that return annual –a minimum 15 12 12 5 (Gross IRR) Target return ‑ 1 ‑ ‑ ‑ 18 20 0% 25 % % % | In sights into the European Alternative Lending market Lending Alternative European the into sights 3 5 years 3 1 period Investment ‑ ‑ ‑ 3 ye 5 ye 5 ye ars ars ars (plus 2 (plus year extensions) 7 year extensions) (plus 2 (plus 10 years 8 year extensions) year extensions) 2 (plus 1 (plus 5 Fund term Fund ‑ ‑ ‑ 10 y 10 y 7 ye ears ears ears ears ars ‑ ‑ ‑ ‑ 2 op 3 op 3 op 3 op

tional one one tional tional one one tional tional one one tional tional one one tional on invested capital invested on 1.50% or commitments –1.75% on 1.50 strategy: and return target pending Various invested invested capital thereafter on basis a reduced on period, investment during commitments –1.75% on 1.50 on invested capital invested on –1% 0.6 around Typically than 1% commitments on than less or capital invested on –1.50% 1.25 Typically Management fee Management

8% 8% 5 6 return Preferred ‑ ‑ 8% 6% 20% 20% 1 15% 20 interest Carried 0% % ‑

Insights into the European Alternative Lending market 35 erland Poland dics Switz Nor se ose on o gal u t elux Por Ben © Deloitte Alternative Capital Solutions sights into the European Alternative Lending market | In m gdo Kin e ited anc eland n r r taly I Spain I U F Germany

Deloitte Alternative Lender Deal Tracker Spring2019

Note: oﬃces included with at least one dedicated Direct Lending professional. The graph does not necessarily provide an overview of the geographical coverage. Who are the Direct Lenders? Direct the are Who Insights into the European Alternative Lending market 36 ro andonpertrctre eigted AverageotoDetADaedonidpointaverage range Strctre the market? What debt structures are available in 2019 Spring Tracker Deal Lender Alternative Deloitte © Deloitte Alternative Capital Solutions es n   3p L45bps L 5-35bps s ote tenoote o eee etons n oest eno et neee to to tes ns etons  eee  s t otsn t oe estte o C nese eee eno et ene tn n et ntne tn tes ontton    s ee o C C o ee e n estte oe oe t et et nese eee eno L 575bps tete eno et | In sights into the European Alternative Lending market Lending Alternative European the into sights ene  eeton  soton  oennts  eee  s ntne e n etons o ee so nesto ee tete ntne L 7bps et te ntne o t  o n  oennts  eee  s s eon en eon eno et eno e n e oe oe ete ee tete nteeto ntne L 7bps te  ontton  oennts  eee  s s ntne oo oo e n o nteeto oe et ee tete ntne L 15bps oo

o stteoses e ntenon n nesente ote testtes ntne n ntne oo eno et n t Insights into the European Alternative Lending market 37 eparate equity raising required as © Deloitte Alternative Capital Solutions celerate the growth of the company and gnificant capital that Alternative Lenders Ac in value shareholder the grow exponentially a shorter time period. No s Alternative Lenders can act as a one stop solution providing debt and minority equity. Si can lend to a single company (€150-300m) making Alternative Lenders ideal for long term partnership relationships and follow on capital for multiple acquisitions. • • • Key advantagesKey Key advantages of using Alternative Lenders to fund a buyand build strategy may include: • • • sights into the European Alternative Lending market | In mber of Alternative Lenders are able ss companies are turning turning are ss companies cent market transactions have been ternative Lenders are actively looking to fund across the capital structure from senior debt through minority equity. to form longer term partnerships with performing private companies to fund expansion. Re A nu Al structured on Debt/EBITDA multiples as high as 4.5-5.0x including identifiable hard synergies. Typically, this is subject to c.30 – 40% implied equity in the structure, conservative based on enterprisevaluations. • • • Opportunity • • • le ‑ Deloitte Alternative Lender Deal Tracker Spring2019 onsoess

st savings, revenues synergies and nk lenders are typically not able

aditionallyprivate companies onso

est o oe o est to fund junior debt/quasi equity risk and would require a sizable equity contribution from the shareholders to fund acquisitions. Co ability to purchase bolt on acquisitions at lower EBITDA multiples makes a buy and build strategy highly accretive for shareholder’sequity. Ba Tr without access to further shareholder funding lacked the ability to make transformationalacquisitions. • • • Sponsor backed versus private Direct Lending deals As % of total deals per quarter • •

to Direct Lenders to finance growth finance to Lenders Direct to Background • More sponsor More Insights into the European Alternative Lending market 38 • • calculations Indicative privately owned companies for acquisitions transformational Unlocking 2019 Spring Tracker Deal Lender Alternative Deloitte s s aain ndiaie ale creation trog A • •

on arbitrage. multiple of a result as creation value any disregarding and assumptions £177m, same the using t In Th et et e calculations on this page illustrate the theoretical effect of value creation through acquisitions financed using Alternative Lenders. Alternative using financed acquisitions through creation value of effect theoretical the illustrate page this on e calculations his example equity value grows from £100m to £252m in 4 years time. Without the acquisition, the equity value would have been only only been have would value equity the acquisition, Without the time. 4 years in £100m £252m to from grows value equity example his © Deloitte Alternative Capital Solutions n t t n te ston te e ntne et s on ne seet ns te et e to to e et te ns seet ne on s Cone snees eton e to e e t nn te stte e ost nn nn t et | In nts sights into the European Alternative Lending market Lending Alternative European the into sights ot t e nees te e te es te e te ston t es te C stte te te es et tstnn nts nts ston tot es te C stte o te ston est s oes et o e eton o ton ton o est • • • • • Assumptions • • • • • tax rate tax 20% Corporate Cash conversion; 75% pa; growth warrants on top on warrants 5% penny with in the business synergies potential £2m with EBITDA £10m generate costs No 10 Co d No Bo % EBITDA % EBITDA st of debt is 8% 8% is debt of st th business business th transaction transaction ebt currently currently ebt Deloitte Debt and Capital Advisory 39 loitte Debt and CapitalAdvisory | De © Deloitte Alternative Capital Solutions

Deloitte Alternative Lender Deal Tracker Spring2019

Capital Advisory Deloitte Debtand Deloitte Debt and Capital Advisory 40 • • What do we do for our clients? 2019 Spring Tracker Deal Lender Alternative Deloitte • • • • • • • Debt and Capital Services provided Services Capital and Debt Advisory Capital and Debt • • • • • • • • • advice Independent Refinancing with those of our clients. our of those with aligned fully are objectives our – finance of providers network. global our through markets debt of spectrum full the Co a independent We provide Off b Off As shareholders to payments Rec Ac Ra Ma from lenders from As sheet balance from value release dvice to borrowers across across borrowers to dvice cessing new debt markets debt new cessing sessing multiple proposals proposals multiple sessing to finance based set pid growth and expansion and growth pid mpletely independent from from independent mpletely turing debt facilities debt turing © Deloitte Alternative Capital Solutions apitalisations facilitating facilitating apitalisations alance sheet finance sheet alance

• • • • • • • • • • • • • • disposals, mergers disposals, Acquisitions, execution expertise Global & resources the execution of raising debt. of execution the to through finance of sources available and structure capital optimum the on advice the provision of strategic Ou global reach. true giving Asia, and Africa America, North Europe, including 30 countries professionals based in A le Fo i FX Ad St St currencies multiple in operations or debt definitions covenant the in reflected objectives strategic in a change of a result as proceeds sale maximise complexity greater and lenders new involving Depth and breadth of expertise in a variety of situations of a variety in expertise of breadth and Depth rategic acquisitions, aple debt packages to reign currency denominated denominated currency reign ditional finance required required finance ditional r expertise ranges from from ranges r expertise mpacts that need to be be to need that mpacts ading team of 200 debt 200 debt of team ading | De loitte Debt and Capital Advisory Capital and Debt loitte • • • • • • • • • • • • • • • • or negotiating Restructuring team Market leading Debt Advisory teams. Debt largest the of one with leader on approach. hands our using achieve, we outcomes client of quality the and challenging transactions approachinnovative to We p Wi De Ex Cre Sh covenants Re Ne to be met be to requirements hedging banks group Lender debt to an Alternative isting lenders transfer transfer lenders isting dely recognised as a Global a Global as recognised dely ort term liquidity pressure liquidity term ort al or potential breach of of breach potential or al rivatives in place and/or and/or place in rivatives w money requirement w money dit rating downgrade rating dit ride ourselves on our our on ourselves ride

• • • • • • • • • • • • Treasury track record Demonstrable to be met be to requirements hedging banks €25m up to €750m. to up €25m from ranging transactions excess of €10bn. of excess in facilities debt combined with 100 transactions over on advised have we Ou t In Hed Ca De Op currencies accounts, countries and exposures FX creating currencies and jurisdictions strategies risk management commodity sh in multiple companies, companies, multiple in sh velop FX, interest rate and and rate interest FX, velop r target market is debt debt is market r target erations in multiple multiple in erations he last 12 months, last he ging implementation or

Deloitte Debt and Capital Advisory 41

ae eane a geneain eeage e eage ae ae ei aie en e nenain ie nenain loitte Debt and CapitalAdvisory | De © Deloitte Alternative Capital Solutions Hig e an ae Hig Hig inancial erorance arket poition lient                                     e Hig Hig an aie Hig High credit quality Complex Complex Deloitte Alternative Lender Deal Tracker Spring2019 Hig ng Hig a ae Hig aeadd                                     ea Hig Hig Hig aie Diﬃcult Sector di anageent Sareolder ridiction

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iai eanai ai d anging ega eninen How complex is your credit? your is complex How Deloitte Alternative Lender Deal Tracker Spring 2019 | Deloitte Debt and Capital Advisory

Global Deloitte Debt and Capital Advisory One of the most successful Debt and Capital Advisory teams

UK Partners

Chris Skinner Karlien Porre Nick Soper John Gregson Floris Hovingh Partner Partner Partner Partner Partner

Deloitte Capital and Debt Advisory +44 (0) 20 7303 7937 +44 (0) 20 7303 5153 +44 (0) 20 7007 7509 +44 (0) 20 7007 1545 +44 (0) 20 7007 4754 [email protected] [email protected] [email protected] [email protected] [email protected]

UK Team

James Blastland Robert Connold George Fieldhouse Anil Gupta Roger Lamont Director Director Director Director Director +44 (0) 20 7303 7502 +44 (0) 20 7007 0479 +44 (0) 20 7007 2612 +44 (0) 113 292 1174 +44 (0) 20 7007 7731 [email protected] [email protected] [email protected]. uk [email protected] [email protected]

Carl Sharman Adam Worraker Tom Birkett Andrew Cruickshank Alex Dugay Director Director Assistant Director Assistant Director Assistant Director +44 (0) 20 7007 7128 +44 (0) 20 7303 8347 +44 (0) 20 7007 9758 +44 (0) 20 7007 0522 +44 (0) 20 7007 9593 [email protected] [email protected] [email protected] [email protected] [email protected]

Holly Fletcher Louise Harvey Ben James Michael Keetley Guillaume Leredde Assistant Director Assistant Director Assistant Director Assistant Director Assistant Director +44 (0) 161 455 6497 +44 (0) 20 7303 3476 +44 (0) 20 7303 2467 +44 (0) 131 535 0384 +44 (0) 20 7007 9561 [email protected] [email protected] [email protected] [email protected] [email protected]

Alice De Lovinfosse Ikaros Matsoukas Phil McManus Henry Pearson Alex Skeaping Assistant Director Assistant Director Assistant Director Assistant Director Assistant Director +44 (0) 20 7007 6220 +44 (0) 20 7303 5841 +44 (0) 20 7303 5323 +44 (0) 20 7303 2596 +44 (0) 20 7007 7881 [email protected] [email protected] [email protected] [email protected] [email protected]

42 © Deloitte Alternative Capital Solutions Deloitte Debt and Capital Advisory Debt and Capital Deloitte Deloitte Alternative Lender Deal Tracker Spring 2019 | Deloitte Debt and Capital Advisory

UK Team

Adam Sookia Carl Stevenson Allen West Naeem Alam Hamish Elsey Assistant Director Assistant Director Assistant Director Manager Manager +44 (0) 113 292 1927 +44 (0) 20 7007 7672 +44 (0) 20 7303 0997 +44 (0) 20 7007 3655 +44 (0) 20 7303 5916 [email protected] [email protected] [email protected] [email protected] [email protected]

Lucy Fall Shazad Khan Hana Kollarova Ross Kolodziej Tyler Lovas Manager Manager Manager Manager Manager +44 (0) 20 7007 2472 +44 (0) 20 3741 2051 +44 (0) 20 7007 5398 +44 (0) 20 7007 1362 +44 (0) 20 7303 2092 [email protected] [email protected] [email protected] [email protected] [email protected]

Ernesto Martínez Dimitris Pantermalis Sam Peachman Shefali Prakash Stephanie Richards Manager Manager Manager Manager Manager +44 (0) 20 7007 2724 +44 (0) 20 7303 5047 +44 (0) 161 455 6415 +44 (0) 20 7007 5826 +44 (0) 20 7303 3052 [email protected] [email protected] [email protected] [email protected] [email protected]

Graeme Rodd Alexis Santis Rishabh Shah Laurens van der Sijp Joe Tipton Manager Manager Manager Manager Manager +44 (0) 20 7007 7009 +44 (0) 20 7007 8062 +44 (0) 20 7007 5869 +44 (0) 20 7007 5439 +44 (0) 20 7303 0428 [email protected] [email protected] [email protected] [email protected] [email protected]

UK Team

Magda Tylus Sam White Ben Wright Laurence Brunt Adina Dumitru Manager Manager Manager Assistant Manager Assistant Manager +44 (0) 20 7007 9318 +44 (0) 113 292 1224 +44 (0) 113 292 1453 +44 (0) 20 7007 4381 +44 (0) 20 7007 4064 [email protected] [email protected] [email protected] [email protected] [email protected]

Anni Gibson Varun Goel Emily Harvey Otto Jakobsson Wangyu Kim (Q) Assistant Manager Assistant Manager Assistant Manager Assistant Manager Assistant Manager +44 (0) 20 7303 0153 +44 (0) 78 8100 8460 +44 (0) 20 7303 4814 +44 (0) 20 7007 3028 +44 (0) 20 7303 8248 [email protected] [email protected] [email protected] [email protected] [email protected]

Tim Mercorio Goutham Panthulu Tomas Reto Luka Bankovich Will Durgan Assistant Manager Assistant Manager Assistant Manager Senior Associate Senior Associate +44 (0) 20 7665 1801 +44 (0) 20 7303 7636 +44 (0) 1727 885221 +44 (0) 20 7007 7480 +44 (0) 20 7007 1618 [email protected] [email protected] [email protected] [email protected] [email protected]

Deloitte UK/US David Flemming Joint Venture Senior Vice President +1 (212) 313 1908 [email protected]

44 © Deloitte Alternative Capital Solutions Deloitte Debt and Capital Advisory Debt and Capital Deloitte Deloitte Alternative Lender Deal Tracker Spring 2019 | Deloitte Debt and Capital Advisory

Global senior team

Australia Austria Belgium Brazil Canada Chile China

Stephen Pollock Ben Trask Sebastiaan Preckler Carlos Rebelatto Robert Olsen Jaime Retamal Patrick Fung +61 02 9322 5621 +43 15 3700 2950 +32 2 800 28 35 +55 813 464 8125 +1 41 6601 5900 +56 22 729 8784 +852 2238 7400 [email protected] [email protected] [email protected] crebelatto [email protected] [email protected] [email protected] @deloitte.com

Czech Republic Denmark France Germany Greece India Ireland

Radek Vignat Thomas Bertelsen Olivier Magnin Axel Rink Ioannis Apostolakos Vishal Singh John Doddy +420 246 042 420 +45 30 93 53 69 +33 1 4088 2885 +49 (69) 75695 6443 +30 210 678 1348 +91 22 6185 5203 +353 141 72 594 [email protected] [email protected] [email protected] [email protected] iapostolakos [email protected] [email protected] @deloitte.com

Israel Italy Japan Luxembourg Mexico Netherlands Norway

Joseph Bismuth Daniele Candiani Haruhiko Yoshie Pierre Masset Jorge Schaar Alexander Olgers Andreas Enger +972 3 608 5554 +39 348 451 8099 +81 80 443 51 383 +352 45145 2756 +52 55 5080 6392 +31 8 8288 6315 +47 23 279 534 [email protected] [email protected] haruhiko.yoshie [email protected] [email protected] [email protected] [email protected] @tohmatsu.co.jp

Poland Portugal Singapore South Africa Spain Switzerland Turkey

Michal Lubieniecki Antonio Julio Jorge Richmond Ang Fredre Meiring Alejandro Gonzalez Samuel Kramer Basak Vardar +48 22 5110 010 +351 210 422 524 +65 6216 3303 +27 1 1209 6728 de Aguilar +41 582 797636 +90 212 366 60 94 mlubieniecki [email protected] [email protected] [email protected] +34 91 443 2552 [email protected] [email protected] @deloittece.com agonzalezdeaguilar @deloitte.es UAE UK USA

Robin Butteriss Chris Skinner John Deering +971 4506 4857 +44 (0) 20 7303 7937 +1 70 4333 0574 [email protected] [email protected] [email protected]

© Deloitte Alternative Capital Solutions 45 Deloitte Debt and Capital Advisory 46 Selected Global transactions Selected credentials Advisory Capital and Debt Deloitte 2019 Spring Tracker Deal Lender Alternative Deloitte UK UK UK UK Nov Dec Feb a 09 Undisclosed Jan 2019 Acquisition Financing

Core Assets Group Assets Core

09 Undisclosed 2019 08 Undisclosed 2018 08 Undisclosed 2018 © Deloitte Alternative Capital Solutions Refinancing Refinancing Refinancing Commify Citation A-Plan

UK/Germany UK UK/US Belgium Nov Dec Dec Feb Acquisition Financing Acquisition Financing Acquisition Financing

GHO Capital LLP 09 Undisclosed 2019 08 Undisclosed 2018 08 Undisclosed 2018 08 Undisclosed 2018

Refinancing

Combell Xceptor STP

NL/Curacao UK Hungary UK Nov Dec Dec eloitte Debt and Capital Advisory Capital and Debt eloitte Feb | D Acquisition Financing

HELL Group Energy

08 Undisclosed 2018 09 Undisclosed 2019 08 €130m 2018 09 ANG325m 2019 Sterling Pharma Centric Health Refinancing Refinancing Refinancing Aqualectra

UK Netherlands UK/Romania UK Nov Nov Dec Feb Acquisition Financing Acquisition Financing

09 Undisclosed 2019 08 €164m 2018 08 £300m 2018 Undisclosed 2018 Dbay Advisors Nordian –IGS Nordian Chimcomplex Refinancing Refinancing Access

UK Netherlands UK Germany Nov Nov Dec Feb Acquisition Financing

Growth Financing Growth

Mobility ConceptMobility

09 Undisclosed 2019 Basecamp –TSHBasecamp 08 £50m 2018 08 £165m 2018 €55m 2018 Refinancing Refinancing Hg Capital Aurora

UK UK UK UK Oct Nov Dec £60m Jan 2019 Port of Tyne Authority Tyne of Port Acquisition Financing

08 Undisclosed 2018 08 £140m 2018 08 £90m 2018 Securitisation James Grant Refinancing Refinancing Equitix SJP

Deloitte Debt and Capital Advisory 47

Wood ByBox Inflexion

2018 Undisclosed 2018 Undisclosed 2018 Undisclosed

2018 Undisclosed Sub-Debt Financing Sub-Debt

Canaccede Financial Canaccede Acquisition Financing Acquisition Acquisition Financing Acquisition Receivables Refinancing Receivables Jul Jun Oct Sep UK UK UK Canada

| D eloitte Debt and Capital Advisory Medifox Latécoerè © Deloitte Alternative Capital Solutions Gala Bingo Gala Refinancing

Undisclosed Debt Advisory Debt 2018 Undisclosed 2018 Undisclosed 2018 Undisclosed

2018 Undisclosed

Project Emoji Acquisition Financing Acquisition Acquisition Financing Acquisition Aug Jun Oct Sep UK UK UAE/UK France

Bridgepoint Five Degrees Five 2018 Undisclosed 2018 Undisclosed 2018 Undisclosed

GrowthFinancing

Macquarie GroupMacquarie Sovos Compliance Sovos

Acquisition Financing Acquisition Acquisition Financing Acquisition Acquisition Financing Acquisition Aug Jun 2018 £62m Oct Sep UK Netherlands UK/US UK

Deloitte Alternative Lender Deal Tracker Spring2019 Dada Refinancing Refinancing Refinancing Safestyle UK It Relation A/S 2018 Undisclosed 2018 £22.5m 2018 £7.5m

2018 Undisclosed

Acquisition Financing Acquisition Sequence Healthcare Sequence Jul Aug Oct Sep UK/Denmark UK/Italy UK UK

SSP Refinancing Refinancing Applegreen Pets at Home Debt Advisory Debt 2018 £20m 2018 £260m 2018 Undisclosed

2018 €300m

Acquisition Financing Acquisition Phoenix Equity PartnersPhoenix Aug Oct Sep Jul UK/Ireland UK UK UK

Refinancing Refinancing Safestyle UK Card Factory Amend & Extend 2018 Undisclosed 2018 £200m 2018 £7.5m

2018 Undisclosed

Education PersonnelEducation Acquisition Financing Acquisition Jul Sep Sep Oct Lonsdale Capital PartnersLonsdale Ireland UK UK UK Deloitte Debt and Capital Advisory 48 Selected Global transactions Selected 2019 Spring Tracker Deal Lender Alternative Deloitte Ireland Ireland Canada UK Apr May Jun £90m Jun 2018 Permanent Financing

Confidential

Growth Financing Growth 08 CAN$500m 2018 08 €20m 2018

Amend &Extend Amend 08 Undisclosed 2018 © Deloitte Alternative Capital Solutions Danu Partners Confidential Carpetright Refinancing

Corrib Oil

UK UK UK UK Jun £400m Jun 2018 Apr May Acquisition Financing

08 £100m 2018 08 Undisclosed 2018

Staple Financing Amend &Extend Amend Amend &Extend Amend 08 Undisclosed 2018 Auto Trader Hg Capital Foundry Findel

Ireland Netherlands UK UK Apr May Jun Jun eloitte Debt and Capital Advisory Capital and Debt eloitte | D Acquisition Financing

Egeria – JET Group –JET Egeria

Growth Financing Growth 08 Undisclosed 2018 €105m 2018 08 Undisclosed 2018

Staple Financing 08 Undisclosed 2018 Confidential Refinancing Access Iris

UK/Ireland UK UK Ireland Jun Apr May Jun Vision BlueVision Solutions Acquisition Financing

Park Developments

08 Undisclosed 2018 08 Undisclosed 2018 New Debt Raising Debt New New Debt Raising Debt New 08 Undisclosed 2018

08 Undisclosed 2018 Refinancing

Allocate Kinapse

UK South Netherlands Ireland Apr Apr Jun Jun Acquisition Financing

Term Sheet Review Sheet Term

08 Undisclosed 2018 PPC South Africa South PPC 08 Undisclosed 2018 New Debt Raising Debt New 08 Undisclosed 2018 ZAR2.5bn 2018 Bridge Financing

Africa

JJ Rhatigan JJ Inflexion PCI

Netherlands Ireland Netherlands UK Apr Apr May Jun Acquisition Financing Acquisition Financing Acquisition Financing

08 Undisclosed 2018 New Debt Raising Debt New 08 Undisclosed 2018 Undisclosed 2018

08 €75m 2018 Egeria –Trust Egeria

Bolster UPMC NBS

Deloitte Debt and Capital Advisory 49 7m

€

Vets4Pets Refinancing Refinancing Kouwenberg 2018 Undisclosed 2017 £350m 2017 Domino's Group Domino's Newport Capital

2018 £80m

Acquisition Financing Acquisition Acquisition Financing Acquisition Dec Dec Mar Jan Netherlands Netherlands UK UK

| D eloitte Debt and Capital Advisory

easyGYM © Deloitte Alternative Capital Solutions Lowe Rental Lowe Countrywide Riviera Travel 2018 Undisclosed 2017 Undisclosed 2017 Undisclosed Staple Financing Staple

2018 £250m GrowthFinancing

Finance Amendment Finance Acquisition Financing Acquisition Dec Dec Mar Jan Netherlands UK/Ireland UK UK

A-Plan Multraship Refinancing 2018 Undisclosed Forest Holidays 2017 Undisclosed 2017 €60m 2018 Undisclosed

Bolt-on Financing Bolt-on

Conduit Refinancing Conduit

Acquisition Financing Acquisition Dec Dec Mar Feb International Car Leasing Car International Netherlands UK Netherlands UK

Deloitte Alternative Lender Deal Tracker Spring2019

Qbuzz

Latécoerè Koncenton Refinancing Refinancing

Project LutherProject Lease Financing Lease 2018 £400m 2017 €35m 2017 €55m 2018 Undisclosed

Acquisition Financing Acquisition Project Luther Dec Dec Mar Feb France Denmark Netherlands UK

Dada DMGT

Westfalia Refinancing 2018 £400m Capex Financing Capex 2017 €250m 2018 Undisclosed

Kalaallit Airports

2018 $140m

Acquisition Financing Acquisition Acquisition Financing Acquisition Dec Jan Mar Feb Denmark UK UK UK

Fundinfo

Hg CapitalHg Fund Raise Refinancing Norli Pension Norli 2018 Undisclosed 2018 CAN$30m 2017 €37m

2018 Undisclosed

Acquisition Financing Acquisition Acquisition Financing Acquisition Dec Jan Mar Mar Denmark UK UK Canada Merchant Advance Capital Advance Merchant Deloitte Alternative Lender Deal Tracker Spring 2019 | Notes

Notes

Important Notice in relation to page 12-13

Disclaimer This material has been prepared by the Private Fund Group of the International Wealth Management division of Credit Suisse (“Credit Suisse”). It is not investment research or a research recommendation for regulatory purposes as it does not constitute substantive research or analysis. This material is provided for informational and illustrative purposes and is intended for your use only. It does not constitute an invitation or offer to the public to subscribe for or purchase any of the products or services mentioned. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated financial service. It is intended only to provide observations and views of the said individual Credit Suisse personnel (to the exclusion of any other Credit Suisse personnel or the proprietary positions of Credit Suisse) as of the date of writing without regard to the date on which the reader may receive or access the information. Information and opinions presented in this material have been obtained or derived from external sources believed by Credit Suisse to be reliable, but Credit Suisse makes no representation as to their accuracy or completeness. Credit Suisse accepts no liability for loss arising from the use of this material. It should be noted that historical returns and financial market scenarios are no guarantee of future performance. Credit Suisse provides no guarantee with regard to the content and completeness of the information and does not accept any liability for losses that might arise from making use of the information.

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