Direct Lending in Europe: Recent Developments

This post is based on a client memorandum by Carlo de Vito Piscicelli, Fabio Saccone, Amélie Champsaur, Robin Barriere, Manuel Metzner, and Valentin M. Pfisterer of Cleary Gottlieb. 

In Italy, France and Germany, lending activities have traditionally been reserved to a limited number of institutions (mainly banks and other regulated intermediaries). Recent reforms in all of these countries have brought about significant developments, by extending to alternative investment funds (AIFs) the ability to carry out lending activities, subject to certain conditions.

The opening of the lending market to AIFs is an important step which could bring additional financial resources to the economy of Italy, France and Germany. While a more encompassing action at the European level is expected, it remains to be seen to what extent the above-mentioned reforms will prove to be effective, in particular as to the possibility for non-domestic AIFs to play an actual role in the lending market of these three countries.

In this memorandum, we provide an overview of the new framework applicable to lending activities carried out by AIFs in Italy, France and Germany.