Corporates seem to be more adventurous in some countries than in others. Spanish and German borrowers overwhelmingly prefer to source alternative finance from domestic investors.

Elsewhere, the picture is mixed and rapidly changing. In the UK, 47% of borrowers are likely to tap Germany-based sources of alternative capital. That number rises to 50% in Benelux and 90% in France. French corporates have embraced the Euro PP market since its formation in 2013 and are at ease with Germany’s thriving Schuldschein market, which offers light documentation and, in the main, better terms than corporates will get borrowing from banks, or raising capital via the public bond markets.

A record EUR14.2 billion (USD15.9 billion) was raised via Schuldschein in the first half of 2016, including EUR8 billion in the second quarter, according to data from Thomson Reuters, the best performance since 2008. This ties in with German corporates reporting a rise in their use of alternative finance in 2016, up from 20% in 2015 to 33% in 2016. More than half of French borrowers were content in 2016 to tap alternative funding sources in Germany, Benelux and the UK.

Corporates are also increasingly likely to tap capital sources outside core EU countries. In 2015, 3% or fewer corporates from the UK and Benelux sought alternative funding from investors based in the Middle East; in 2016, that share was 17% and 19% respectively. A fifth of Italian corporates were willing to tap Middle East funding sources in 2016; the previous year, the number was 7%.

Asian investors became significantly more prominent in 2016. UK corporates have been comfortable with Asian investors for some time, with 30% of corporates tapping Asian investors in 2016, up from 20% in 2015. However, other European companies are rapidly catching up, with 30% of Italian corporates accessing Asian investors, up from 7% in 2015 and making them the largest of foreign investors in Italy, 17% of French corporates and 8% of Benelux corporates. By contrast, the role of investors from the U.S. stayed static or fell in 2016 across France, Germany and Italy, only showing moderate increases in the UK (up to 23% from 17%) and Benelux (up to 19% from 13%).