The latest trends across European private credit markets
The private credit market is cautious but optimistic amid macroeconomic volatility, after European private debt transaction volumes reached an all-time high in 2024. Our regional guide profiles all the major markets, looking at how the UK has rebounded strongly and why the German market is full of potential.
EUROPE REGIONAL GUIDE
DOWNLOAD THE MAGAZINE
LATEST HEADLINES FROM EUROPE
ANALYSIS
PREVIOUS COVERAGE
After the strong performance of private credit markets post-pandemic, European markets saw a slowdown in 2023 with fundraising and deal volumes falling back. But market participants expect a stronger year in 2024. Our regional guide profiles all the major markets, and explains why France is consolidating its place as number one for private debt in Europe.
Regional guide: Signs of green shoots in Europe
Fundraising and deal volumes are down but there were clear signs of a rebound in Q4 2023.
Regional guide: UK deal volume down sharply amid unpredictable outlook
Europe’s largest direct lending market has decreased by 43% in volume over the past two years.
Regional Guide: France sets the pace for its neighbours
The only major European market that saw deal volumes rebound past 2021 levels.
Regional guide: Defensive sectors offer opportunities in Germany
With just five funds that focus on the German private credit market raised since 2019, GPs need to choose the right niche.
Regional guide: Benelux performs well despite M&A slump
The Netherlands is the engine of growth in Benelux private credit.
Regional guide: Nordics is one of the fastest-growing private credit markets in Europe
Sweden accounts for almost half of the deals done across the region.
Regional guide: LPs warming to opportunities in Central and Eastern Europe
Less intense competition in markets such as Poland, the Baltics and Romania can result in better risk-adjusted returns.
Regional guide: Southern Europe’s lower mid-market attractive for direct lending
In Spain and Italy, private credit deal volumes were not hit as hard by the downturn in larger M&A across Europe.
Five key trends in the European debt market
Fundraising and deal volumes show signs of picking up after falling sharply in 2023.
Arrow Global on private debt’s enduring impact and opportunity
Strategic value and rapid growth in Europe mean that private debt is now a highly significant asset class, says Arrow Global Group’s Zach Lewy.
Opportunistic credit sparks investor interest in Europe
The European mid-market is proving fertile ground for more complex capital solutions.
Investec’s tailored approach to credit investing across Europe
A flexible offering and established track record remain key in the European lower mid-market, say Investec’s Helen Lucas, Alexandre Neiss and Kai Stengel.
Park Square: Junior debt opportunities are set to shine
The reopening of syndicated loan markets is creating huge opportunities for junior debt lenders, says Park Square’s Robin Doumar.
Pemberton Asset Management: A vintage year in Europe
Higher returns and a broad opportunity set are bolstering the outlook for private debt in Europe, says Pemberton Asset Management’s Robert Wartchow, but a consistent, credit first investment approach is critical.
Investors are opening their eyes to the direct lending opportunities in Europe. In our PDI Europe Report 2023, we survey the current state of the debt market across Europe and find out why France has overtaken the UK for the first time in terms of deals. Global fund managers are also looking further afield for deals, with some of the larger private debt funds considering opening offices in Warsaw.
Regional Guide: Fewer deals but a lucrative opportunity set
Private debt is moving beyond pure sponsor-driven M&A in Europe as financing options continue to grow.
Regional Guide: United Kingdom slips back
The UK has dropped behind France for the first time in terms of deals.
Regional Debt Guide: Benelux speeds up
This fast-growing region presents strong direct lending opportunities.
Regional Debt Guide: France takes first place
The country is now the most active private debt market in Europe.
Regional Debt Guide: Nordics ‘last bank stronghold’
Banks remain strong in Scandinavia, so debt funds are having to learn to compete on their own terms.
Regional Debt Guide: Greater challenges ahead for Germany?
The German market held up well in 2022, but 2023 could prove more challenging.
Regional Debt Guide: Private lenders find space in Central and Eastern Europe
Western GPs are honing in on the region and looking to open offices in Warsaw.
Regional Debt Guide: Funds steal a march in Southern Europe
Private funds are taking a larger share from banks as deal volumes grow.
Key trends: Direct lenders are targeting Europe as banks retrench
UK falls to second place in terms of debt transactions but the new market leader faces headwinds.
Kartesia: Delivering a positive impact through SFDR
LPs are asking more questions about ESG, and the EU’s legal framework has a big part to play in driving those discussions, says Coralie De Maesschalck, head of CSR and ESG at Kartesia.
The new-look distressed opportunity in Europe
Inflationary pressures and higher interest rates are expected to drive broad-based distressed activity in coming months, even in sectors regarded as safe havens.
Arrow Global: The value of collateral in European private debt
The bulk of underlying collateral in Europe is real estate – a useful form of protection in inflationary times, says John Calvao, fund principal at Arrow Global.
Fidelity International: Why partnerships matter in the mid-market
Facing an unprecedented set of external factors, direct lenders are being forced to think differently, say Fidelity International’s Marc Preiser and Raphael Charon.
Fiera Real Estate: Real estate credit proves its worth in Europe
European property developers are looking for more flexible forms of finance, which plays to the strength of private debt, say Fiera Real Estate’s David Renshaw and Richard Howe.
Barings: Europe’s compelling private debt opportunity
M&A activity may have slowed but the European market continues to offer the potential for attractive returns, says Adam Wheeler, co-head of Barings’ Global Private Finance Group.
Investec Direct Lending: The power of the lower mid-market
Growth-oriented businesses remain underserved by lenders in Europe, say Investec Direct Lending’s Callum Bell and Megan Sachs.
Generali Investments: A paradigm shift for European debt
Private debt funds are filling the gap left by bank retrenchment, says Sandrine Richard, head of private debt at Generali Investments.
Signal Capital: Positioning for sizeable pockets of opportunity
You don’t need mass distress to make compelling risk-adjusted returns in Europe, says Elad Shraga, partner and chief investment officer at Signal Capital.
Despite unprecedented macroeconomic uncertainty, private credit funds in Europe enjoyed the busiest Q2 on record this year in terms of deal volumes, as alternative lenders stepped into the gap left by banks and public markets. Our Europe Report 2022 looks at how this shifting landscape has thrown up a set of opportunities for debt investors. Check out our European Regional Guide to see how the different markets compare.
Regional Guide: Europe’s ‘incredible’ growth
The European private debt market was busier than ever in H1, despite the macroeconomic challenges.
Regional Guide: United Kingdom
While dealflow remains strong, lenders are cautious as we head towards the end of the year.
Regional Guide: France
The market in France remains very competitive between banks and credit funds.
Regional Guide: Germany
Private debt proved its resilience in the first half, compared with the increasingly volatile public markets.
Regional Guide: Benelux
Benelux has built a strong fourth position in European deal volumes, supported by strong fundamentals.
Regional Guide: Nordics
Sweden and Denmark continued to be the main drivers of dealflow in the first half.
Regional Guide: Central and Eastern Europe
The retrenchment of banks is proving a boon for private debt markets, especially in Poland.
Regional Guide: Southern Europe
SMEs are increasingly keen to work with private lenders, with Spain a standout market.
Europe: Seven key trends
The shifting landscape is throwing up a set of openings for European investors.
Renewables reassessed: Eyeing the energy opportunity
With energy security top of mind, the opportunity set for private credit in green energy generation across Europe has moved up the agenda for both funds and their investors.
Permira: Private debt draws on record of resilience
With prudent investment strategies, Permira Credit’s David Hirschmann argues that private debt can be a bastion of resilience during the economic downturn.
Apera: The lower mid-market offers compelling opportunities
There are many reasons to favour the smaller cap deals in times of economic uncertainty, argue Klaus Petersen and David Wilmot, founding partners, and Louis-Matthieu Heck, partner, at Apera Asset Management.
European debt: Opportunity beckons as banks retrench
Record deal levels in Europe point to a market that is rising to the macroeconomic challenges.
Apex: Tough times present opportunities as well as threats
The private credit markets in Europe are in good shape to withstand an economic shock, with technology set to reduce risks and increase efficiencies for managers, says Keith Miller, global head of product – private debt at Apex Group.
Barings: Structural change in Europe as funds take market share
Direct lenders in Europe have gained ground in the absence of syndicated lenders, and are unlikely to look back, says Adam Wheeler, co-head of global private finance at Barings.
Capital Four: Opportunities in the Nordics
The Nordic region provides a huge market for private debt investors, says Capital Four CEO Sandro Näf.
Arrow Global: Why local knowledge counts in Europe
Portfolio compositions are evolving in Europe to give greater weight to real asset-backed credit. Accessing that opportunity requires on-the-ground expertise, say Arrow Global’s Zach Lewy and John Calvao.
Bridgepoint: ‘Q2 was our busiest quarter ever’
As public markets adjust and opportunistic credit comes alive, there are plenty of reasons to be excited about private debt, says Andrew Konopelski, managing partner at Bridgepoint Credit.
The search for stability
European debt activity is consolidating around non-cyclical sectors, as lenders seek out stable revenues.
Paul Hastings on the healthy outlook for European direct lending
Dislocation is creating opportunities for lenders and driving changes to fund structures, say Luke McDougall, co-chair of the global finance practice, and Diala Minott, private funds partner, at Paul Hastings.
European markets are rebounding fast with opportunities growing across the continent. Private Debt Investor’s first-ever Regional Guide to Europe charts country trends across the continent and portrays an optimistic picture of a maturing market where debt funds are continuing to take market share from banks, with Germany, Spain and the Benelux region among the stand-out performers.
Regional Guide to Europe: UK
The UK remains the most mature of Europe’s direct lending markets but share fell back slightly in H1.
Regional Guide to Europe: France
Direct lenders are competing strongly with local banks as private debt had some of its biggest months ever in France.
Regional Guide to Europe: Germany
Senior and unitranche deals saw the best H1 since 2012 as debt funds continued to increase their share versus banks.
Regional Guide to Europe: Benelux
The region is only just behind Europe’s three biggest markets amid sharp growth in deal volume.
Oquendo Capital on Spain’s growing private debt market
Alfonso Erhardt, founding partner of Oquendo Capital, discusses the growing momentum in the Spanish corporate private debt market and the opportunities for direct lenders.
Regional Guide to Europe: Southern Europe
Both Spain and Italy have rich potential, say fund managers, as deal opportunities continue to expand in the region.
Regional Guide to Europe: Nordics
From a slow start, debt is gradually finding its feet in the region as investors and GPs embrace the asset class.
Regional Guide to Europe: Central and Eastern Europe
Warsaw-based manager CVI’s first close in Poland augurs well for one of Europe’s most promising markets.
Average fund sizes soar in first half
Three-quarters of European funds beat their targets in H1.
Five key trends in European private debt
European private debt remains resilient while investors prioritise differentiated strategies.
European debt funds prove their worth
European fundraising has remained resilient despite covid-19, with lenders taking market share from banks. We take a look at how fund managers are faring.
Paul Hastings: Lenders warm to ‘mix and match’ investing
High-growth assets and minority positions call for creative structuring as bilateral deals take on multi-tier capital structures. Luke McDougall and Diala Minott, both partners at Paul Hastings, explain more.
Europe powers ahead as deal volumes hit record
The UK remains out in front but opportunities are growing across the continent.
FIRSTavenue’s head of EMEA says investors are seeking niche strategies
Investors are keen for new options in non-correlated, niche strategies, says Tavneet Bakshi, head of EMEA at FIRSTavenue.
Click here to access Private Debt Investor’s in-depth special reports covering a wide array of topics, plus our digital magazines.
