Europe

Events in the Middle East may add to construction costs and financing pressure, but after a decade of shocks, Europe’s mid-market lenders are prepared to navigate volatility, says Arrow Global’s Ellis Sher.

Consolidation continues apace in the mid-market as private credit seeks out new origination channels.

As investors place greater emphasis on diversification, this often-overlooked sector is gaining attention – despite the risks.

The European mid-market remains in good health, benefiting from market dynamics that set it apart from the US, says Peter Arnold, head of European private markets at LBP AM European Private Markets.

Though North America and Western Europe aren’t at risk of losing investors, demand for diversification and spread premiums are moving dollars towards Asia-Pacific.

Europe’s structural advantages create a compelling opportunity set for private credit investors, according to Andrew Cleland-Bogle, partner and head of direct lending, and Stephen Escudier, partner and co-head of credit opportunities, at Bridgepoint Credit.

Mattis Poetter of Arcmont Asset Management and Mat Linett of Churchill Asset Management explain why the picture for mid-market lending remains compelling, despite negative headlines.

With the upper end of the mid-market becoming more competitive, questions turn to the risk of private debt’s big hitters moving further downstream.

Asia-Pacific is complex and demands a sophisticated approach to individual markets. But the opportunity has never been better for managers with deep understanding and relationships, says Haseeb Malik, head of Asia Credit at Värde Partners.

DPI may primarily be seen as a private equity problem, but an expectation of timely returns means private credit is being held to an even higher standard.