Thriving Private Lending Industry in Europe Draws in Investors
In a shift that signals growing interest in the European private credit market, Axa Investment Managers and AlTi Global are bullish on the region's potential. Christophe Fritsch, head of the global alternative credit business at Axa Investment Managers, and Michael Tiedemann, founder of AlTi Global, have expressed optimism about the market's robustness and growth opportunities.
According to Fritsch, Europe benefits from improved economic indicators, lower energy costs, less impact from negative trade policies, and supportive fiscal measures. This positive outlook is reflected in the recent surge in private credit activity, with over €11 billion in direct lending volume in the last three months.
The surge in private credit activity is driven by stricter bank capital regulations that are limiting traditional bank lending capacity. This regulatory shift creates significant growth opportunities for private credit providers, who are increasingly becoming a critical financing source for corporates and private equity sponsors.
The DACH region, comprising Germany, Austria, and Switzerland, is a key growth market, with the PDI DACH Forum highlighting growing investor sentiment and allocation requirements. The forum emphasizes strategic partnerships, capital deployment, and market intelligence specific to DACH’s private credit market, which is Europe’s third-largest private debt market.
Private credit is also playing a pivotal role in financing large buyouts and refinancing near-term debt maturities, especially when public debt markets are less accessible due to factors like tariff uncertainty and geopolitical risks. Large private equity firms are increasingly using private loans to finance larger buyouts, fueling private credit growth.
In the real estate sector, private credit is becoming crucial for financing projects aligned with the continent’s low-carbon transition. Its flexibility and fewer regulatory constraints compared to banks make private credit well-positioned to fund mid-sized sustainable real estate projects, appealing to investors seeking income, impact, and inflation protection.
AlTi Global and Axa Investment Managers, through industry involvement and market intelligence, align with these observations, showcasing private credit as a resilient and expanding asset class in the German-speaking region and across Europe. Allianz cooperates with AlTi through its venture capital arm Allianz X, and AlTi is hoping for bargains in the secondary market and aims to act counter-cyclically.
Michael Tiedemann, the founder of AlTi Global, is considering further acquisitions in the German-speaking region, particularly in firms with assets under management of $5 to $10 billion. Regulatory authorities may pay more attention to private credit in three to four years, according to Tiedemann.
This outlook indicates sustained growth opportunities in private credit driven by market dislocations, structural financing needs, and strategic partnerships between institutional investors and private credit managers. The continued low interest rate environment is strengthening the stability of companies, households, and the real estate sector in Europe, making private credit an attractive investment option.
[1] Source: Preqin [2] Source: PDI DACH Forum [3] Source: Preqin [4] Source: Preqin
- Axa Investment Managers and AlTi Global, expressing optimism about the European private credit market, attribute the recent surge in private credit activity, with over €11 billion in direct lending volume in the last three months, to stricter bank capital regulations that are limiting traditional bank lending capacity.
- Michael Tiedemann, founder of AlTi Global, is considering further acquisitions in the German-speaking region, particularly in firms with assets under management of $5 to $10 billion, anticipating that regulatory authorities may pay more attention to private credit in three to four years.
