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Analysis Private credit
Can funds find pots of gold in Europe?
by Kathryn Gaw
For years, US private credit has been tapping high net worth individuals. Now funds are trying to do the same in Europe — but markets across the pond are fragmented and heavily regulated
Diversification is not only important for investors — asset managers are increasingly looking to diversify their investor bases, too. While private credit’s key backers remain institutional investors, new channels are ramping up across Europe to tap the wealthy.
Combined with family offices, these avenues could represent a multi-trillion-euro opportunity, which could see the European private credit market start to compete with its US counterpart. “The US has led the way in this space, but Europe and Asia are catching up,” says Rashmi Madan, head of EMEA for Blackstone Private Wealth.
Tapping the wallets of affluent individuals transformed the landscape of US direct lending, giving private credit shops the firepower to do multi-billion-dollar deals and take significant market share away from banks. Now the European market is starting to see euros flow in from wealthy Europeans.
“Even though we have already seen strong momentum for our private credit strategies, we believe it’s still early days,” says Madan. “We’re at the beginning of a global megatrend of private markets opening to individual investors.”
Starting to work both ways
Tired of the prolonged low-rate environment and equity market volatility, more European individuals are discovering the benefits of private credit and are keen to take advantage of its diversification, higher returns and lower volatility. At the same time, private credit strategies have become much more accessible for individual investors thanks to new structures, such as ELTIF 2.0, as well as open-ended evergreen funds.
“We have seen surging interest from the private wealth segment, and this trend shows no sign of slowing down,” says Lori Pomerantz, managing director, global head of business development for private credit at Partners Group.
“This demand reflects a growing awareness of evergreen structures, which provide simplified access to an asset class that has historically been reserved for institutions. The higher rate environment and heightened volatility across more traditional asset classes have also supported inflows. Even as economic conditions normalise, we expect demand for private credit to remain elevated as allocations shift from traditional fixed income, and the line between liquid and private markets continues to blur.”
We’re at the beginning of a global megatrend
Rashmi Madan
Head of EMEA
Blackstone Private Wealth
A Citi research report published this year found that the global wealth market could be worth as much as USD 70tn by 2033. Separate research from Barclays Private Bank reported that 79% of private investors expect to increase their allocations to private markets, while 47% said they would specifically consider private credit. A few simple calculations can demonstrate the potential size of the private wealth opportunity. But until recently, private credit was effectively shut out of the EU non-institutional market.
ELTIF 2.0 changed that. It came into effect on 10 January 2024, removing the previous EUR 10,000 minimum investment threshold and the 10% cap on retail portfolios, allowing for open-ended/evergreen funds, loosening diversification and leverage constraints, and broadening the range of eligible assets to include private credit for the first time.
Soon after, BNP Paribas, AXA IM Alts, Muzinich, Ares and M&G launched private credit ELTIFs. In September, Apollo announced it was adding three new evergreen ELTIF products to its wealth platform, including the Apollo European Private Credit ELTIF. And earlier this year, BlackRock’s private credit fund was added to the Clearstream platform, in a deal intended to broaden its access to the wealth markets. At the time, Fabio Osta, head of the EMEA wealth team at BlackRock, said they were “democratising access to private markets for more investors”.
Clearly there is growing non-institutional demand for these strategies. Ares’ private credit ELTIF — the Ares European Strategic Income ELTIF Fund — was made available to individual investors in 2024, and within its first year its assets under management (AUM) had passed EUR 2.2bn. By the end of September 2025, its AUM was above EUR 5bn.
ELTIF isn’t the only option
While ELTIF 2.0 has ushered in a new generation of funds friendly to high-net-worth investors (HNWIs), there are other ways for private credit managers to reach the European wealth market. Blackstone and Partners Group both offer open-ended evergreen funds which have accumulated billions of euros of investor funds over the past few years. Blackstone’s ECRED is now worth more than EUR 3bn, having tripled in size over the past year. (It is still small compared to Blackstone’s US version, which has AUM of nearly US 80bn.)
Meanwhile, Partners Group’s Private Credit Evergreen Fund recently passed EUR 2.1bn, with recent growth attributed to the influx of individual investors.
“We are entering new markets like Italy and are innovating through new technologies like the first reinvesting CLO in the European direct lending market,” says Andrea Fernandez, head of product management and investor relations at Ares Management.
Fernandez notes that, as the asset class grows, manager selection will become more prevalent and more important — especially as more unsophisticated investors start to enter the space.
There are a few key obstacles which may prevent the European wealth market from reaching the highs of the US. First, there is the issue of regulation. The regulatory regime for marketing private credit funds to wealthy individuals and similar investors in Europe is complex and depends heavily on the fund structure, the domicile of the fund and manager, and the country where the products are being marketed. As a general rule, managers cannot market their products directly to investors, which means that both parties are reliant on intermediaries, such as wealth managers and private banks.
Intermediaries play a key role in distribution
Lori Pomerantz
Managing director
Partners Group
“Intermediaries play a key role in the distribution of private credit products in Europe, making evergreen funds available on their platforms and providing the ‘last mile’ delivery to end-investors,” says Pomerantz. “They are on the front line when it comes to educating investors about the asset class, product features, and how private credit exposure can fit within broader portfolios. This education is absolutely critical for building long-term, aligned investor bases.”
However, some intermediaries are a potential challenge. One portfolio manager told Creditflux that when they meet with intermediaries to discuss their private credit products, the conversation often begins with an explanation of what a loan is. While this anecdote is not representative of all intermediaries, it highlights the lack of standardised knowledge across the increasingly influential wealth advisor market.
Education will be paramount in the safe growth of this investor segment. In the Barclays Private Bank report, 69% of private investors said they use trusted wealth managers and/or relationship managers as a key source of advice for information on investing in private markets.
Private banks such as Coutts and Julius Baer have struck deals with managers to distribute their products to their sophisticated and ultra-high net worth client base, but in order to fully capture the wealth market opportunity there will need to be a much wider push to both educate and incentivise financial advisors and wealth platforms to market these products on their behalf. And time is of the essence.
Motivations for European wealth investors in private markets
Source: Savanta x Barclays Private Bank LP Survey, June–August 2025
Private credit managers aren’t the only ones who have noticed this growing wealth market interest. Across Europe and in the UK, regulators, governments and central banks are starting to raise questions about the suitability of the asset class for the retail market. During a recent House of Lords Financial Services Regulation Committee hearing, Blackstone, Ares and Apollo bosses were grilled on the risks of bringing more retail investors into private market investment strategies — along with the risks of locking these investors out of a potentially lucrative portfolio play.
“The European market is fragmented. Each country has unique regulations, frameworks and languages, and that requires a tailored approach,” says Madan. “Governments and regulators in Europe acknowledge this, and there is a broad consensus that we should do more to make this type of investing accessible — so we are optimistic.”
Mattis Poetter, CIO of Arcmont Asset Management, believes that private wealth channels can unlock even more investment in Europe as unsophisticated investors start seeking out routes to access the asset class. The widening of the investment base beyond HNWIs may help Europe catch up with the US market, but it will not be easy.
“The structure is a lot easier in the US because you’ve got one country, one jurisdiction, one regulatory set,” says Poetter. “Also, the HNWIs in the US... are more sophisticated towards capital markets than the average European.”
