Europe

Spread compression and lack of dealflow are among the concerns, but there is hope of an improving picture as the year progresses.

As managers assess tariff impacts, sectors such as healthcare and business services are seen as safe bets. Meanwhile, domestically focused businesses may stand to benefit from the decline of globalisation.

The region still has economic and geopolitical challenges but, with negative sentiment around the US, has an opportunity to grow its share of the private debt market.

ECRED, which was launched in late 2022 amid headwinds in the region, has reached a €2bn fundraising milestone.

A tech-led origination strategy that identifies high-growth micro-sectors can mitigate risks posed by macroeconomic volatility, says Philippe Arbour, senior partner and head of UK at Tresmares Capital.

Deals in the Netherlands have climbed steeply in the past five years.

The UK market accounts for almost three out of every 10 transactions across Europe.

LPs should prioritise managers with deep, locally rooted teams and robust credit capabilities to unlock the full potential of the European mid-market, says Boris Harmsen of Pemberton Asset Management.

Regulatory changes have opened up Germany’s private credit landscape over the past decade, with compelling returns for investors going forward, writes Jakob Schramm of Golding Capital Partners.

Europe’s strong track record for private credit is cause for celebration, even as increased competition for assets is driving a diversification trend across Europe.