When French buyout firm Eurazeo bought tax-free shopping business Fintrax in November, it didn’t go to its bank to borrow money, it went to a direct lending fund. While that is not unusual these days, the amount of money they borrowed was – €300 million in all from Ares Management, the largest amount ever lent by a single debt fund on a deal in Europe.

The deal was a landmark for the industry and would have been unthinkable just two years ago. But the explosive growth of the direct lending market has meant that such funds have markedly changed the way they do business - raising bigger funds, doing bigger deals, competing head on with bank lenders and the bond markets, and offering cheaper prices.