European Private Credit: Growing Source of Funding

Private credit has seen marked growth in Europe since the global financial crisis (GFC) as providers have expanded significantly across the European lending market. European banks shifted their focus towards lending to typically larger investment-grade corporates as a result of more stringent regulatory requirements and balance sheet pressures. Private credit managers have taken advantage of this opportunity over recent years as demand for lending has increased in combination with a healthy mergers and acquisitions (M&A) market and a large increase in committed, but unallocated private equity (PE) capital, ie “dry powder”. European banks were historically more significant providers of loans to the corporate market than in the US and their post-GFC credit focus’ change has left an opportunity that has been seized by both European and US private credit managers. KBRA has published wide-ranging research reports on private…