Listen to the latest episode of Credit Exchange with Lisa Lee
Published in London & New York
10 Queen Street Place, London
1345 Avenue of the Americas, New York
Creditflux is an
company
© Creditflux Ltd 2025. All rights reserved. Available by subscription only.
Event Debtwire Private Credit Forum Europe
Feeling positive about European private credit
by Lisa Fu & David Rollier
Government plans for growth and banks’ lending strategies were among the topics creating an upbeat mood among attendees at this year’s Debtwire Private Credit Forum Europe in London
Despite significant global geopolitical uncertainty, the overall mood in European private credit was positive as private credit managers and limited partners gathered for the annual Debtwire Private Credit Forum Europe.
Historically, the US private credit market has garnered more attention than its European counterpart, due to its size, extensive ecosystem and numerous large cap deals. The US market totalled USD 1.1tn in assets as of July 2024, compared to USD 505bn for the European private credit market, according to a Goldman Sachs Alternative Investments report. However, with financing needs in the region growing and investors interested in committing capital, the European private credit market is poised for growth.
The panel on European private credit featured (from left): Diala Minott, Paul Hastings; Natalia Tsitoura, Apollo Capital Solutions; Mike Dennis, Ares Management; Mike Carruthers, Blackstone Credit and Insurance; Luis Mayans, La Caisse; David Witkin, PSP Investments
Investors turn to Europe
“It’s probably the first time in 25 years that I have seen so much interest from institutions but also wealth management clients to discuss Europe,” said James Reynolds, global co-head of private credit at Goldman Sachs Asset Management, during a fireside chat. The asset class has proven resilient, he added. “In Asia, Australia and around the world, there’s real interest in private credit in Europe.”
Sentiment about the region has changed since the start of the year, believes Natalia Tsitoura, head of European origination at Apollo Capital Solutions. “In the beginning of the year, everybody was really bullish around the US... a couple of months later, this has just pivoted,” she said.
Regulatory impact on banks
In addition to the increasing global investor interest, growth in the region is likely to come from European banks reducing lending and collaborating with private credit managers as regulatory pressures mount.
“Banks are fee businesses,” said Mike Dennis, co-head of European Credit at Ares Management. “They are trying to figure out how to protect their income in a world where they don’t have the balance sheets to manage or hold the assets. And so I think you are going to see more [collaborations between banks and private credit managers].”
Recently, a number of European countries have made big commitments around growth, but constrained banks cannot provide all the necessary debt financing on their own. This creates an opportunity for private credit managers to help them provide some of the debt needed.
It’s probably the first time in 25 years I’ve seen so much interest from institutions to discuss Europe
James Reynolds
Global co-head of private credit
Goldman Sachs Asset Management
Canadian institutional investor PSP Investments has provided debt alongside banks, recently closing a deal where private credit lenders provided the second lien debt and the banks provided a first lien broadly syndicated loan, said David Witkin, head of European credit investments at PSP Investments.
Partnerships between banks and private credit, particularly in the areas of asset-backed finance, can usher in the next step of growth for private credit, said Luis Mayans, managing director for corporate and infrastructure credit at La Caisse.
Elias Lambrianos, Debtwire; Lisa Lee speaks to Stuart Mathieson, Barings; Natalia Tsitoura, Apollo Capital Solutions
There is an opportunity for private credit managers to look at portfolios of consumer credits, leases and other segments that are still dominated by the banks, as these pools are often considered investment grade assets. These lower-yielding investments could become an area of focus for private credit managers as and when insurers, which like investment grade assets, become a larger portion of their investor base.
Apollo is a case in point. Through its funds and affiliates it invested in a portfolio of infrastructure credit held by European bank Santander late last year. The transaction allowed the bank to “proactively rotate assets and maximise profitability”, said Marcel Patino, global head of private debt mobilisation at Santander.
Creating new kinds of partnership
Private credit managers can find creative financing solutions for assets that do not fit the normal structure of an investment grade bond, said Mike Carruthers, European head of private credit at Blackstone.
For example, private credit managers can use debt facilities provided by banks that cannot lend directly. This strategy reduces the burden on the bank’s balance sheet and increases a manager’s lending capacity. Banks may also provide subscription lines and leverage facilities for direct lenders.
Lenders focus on resilient sectors including software and business services
by Elias Lambrianos, Managing editor, Debtwire EMEA
On 17 June, Debtwire held its 12th annual Private Credit Forum Europe at the Dorchester Hotel in London. The conference was followed by the Direct Lending Awards gala dinner.
The day kicked off with keynote speaker James Reynolds, global co-head of private credit at Goldman Sachs Asset Management. Multiple panels followed with speakers from Apollo, Ares, Blackstone, Barings, Ardian, Eurazeo, Muzinich, Barclays, KKR, Bayside Capital, BCG, Paul Hastings, FTI Consulting and others. Around 800 delegates attended in-person and virtually.
Private credit continues to demonstrate its appeal and resilience as an asset class in Europe despite the array of challenges facing the industry, panellists said during the forum.
Lenders have seen strong growth in their European portfolios, in part because they have looked to build up resilient books that can weather the volatility seen in recent years through events like the COVID pandemic or the Ukraine war.
While no sector is fully immune to these disruptions, lenders are largely concentrating on more robust areas like software or business services, helping their portfolios outperform national economies as well as comparable US-based assets.
Participants described current investor sentiment around Europe overall as “bullish” — a marked departure from a few months ago, when asset managers were more focused on allocating in the US.
“You have a really interesting environment at the moment where it’s creating opportunities for all of us here,” one panellist said. Banks remain constrained at a time when a lot of European economies have made substantial commitments around growth in areas ranging from defence and AI to climate change, potentially creating opportunities for the private credit market.
Firms whose capital structures were formed during the low interest rate environment and subsequently struggled when rates increased could prove to be a challenge for existing private credit lenders, as well as an opening for new lenders.
The close relationship lenders have with their portfolio companies and sponsors, coupled with in-depth due diligence at the time of investment, should enable them to put workaround plans in place quickly if the need arises.
Looking forward, the industry is likely to see continued convergence between private credit direct lending and the BSL market as the former grows in size.
