Loan-originating funds have played a critical role in the growth of Europe’s private debt markets and should therefore be carefully considered in the upcoming implementation of the revised AIFMD framework.
This is the finding from the latest market insights report from the European Fund and Asset Management Association (Efama).
The Brussels-based industry group is calling for a “proportionate” implementation of the revised framework, which is due to take effect from April 2026.
According to Efama’s report, EU debt investment reached nearly €75 billion in 2024, driven by investor-demand for long-term yield and the growing synergy between private debt and private equity.
Furthermore, loan-originating funds account for two-thirds of private debt commitments between 2020 and 2024 with direct lending strategies making up the majority.
LoFs also remain concentrated in a handful of financial centres in Europe with Luxembourg accounting for 57% of the 2024 commitments.
As a consequence, Efama is calling for regulators and policymakers in the EU to consider the growth and diversity of the LoF market when looking at any future rules.
In addition to the AIFMD revision, ESMA has also proposed regulatory technical standards for LoFs that reflect the need for a variety of tailored approaches.
“The revised AIFMD framework is an important step toward a more harmonised EU approach to loan origination,” said Zuzanna Bogusz, senior regulatory policy advisor at Efama
“If implemented in a proportionate way, it can support the responsible growth and cross-border scaling of loan-originating funds, while strengthening risk management and investor protection across the market.”
