Europe’s private credit market is entering a new phase of maturity, according to speakers at Funds Europe‘s European Fund Finance Securitisation Forum, where investors, lenders and advisers discussed the pressures, opportunities and structural evolution shaping the sector.
While recent headlines around software exposure, liquidity concerns and fund redemptions have rattled sentiment, panellists argued that the underlying fundamentals of private credit remain resilient. The discussion focused heavily on asset-backed lending (ABL), securitisation and the growing role of private capital in European financing markets.
Speakers noted that the first quarter of 2026 marked a shift from the highly competitive conditions seen at the start of the year. Transactions are still being completed, but lenders are applying more scrutiny and taking longer to commit capital. Rhita Sami of Hayfin said that markets remain active, although due diligence has intensified, particularly around collateral quality and portfolio composition.
Kevin Early of Ares Management Corp said that the market has moved from a period of abundant liquidity to one where lenders are becoming more selective. However, he stressed that pricing and leverage levels have not deteriorated materially, suggesting confidence in the broader asset class remains intact.
A recurring theme throughout the panel was the disconnect between negative headlines surrounding private credit and the relative lack of focus on private equity, despite equity investors holding the first-loss position in most structures. Panellists argued that private credit’s visibility in public markets, particularly through business development companies in the US, has made it a more prominent target for scrutiny.
The conversation also highlighted growing interest in secondary transactions and portfolio sales as funds seek liquidity solutions. Market participants said secondary private credit markets are developing steadily, supported by increasingly sophisticated leverage structures.
Regulation emerged as another major talking point. Speakers discussed how evolving European securitisation and capital rules may create additional operational burdens and uncertainty for lenders. Adam Burk, a lawyer at Travers Smith, warned that reporting and transparency requirements could disproportionately impact smaller ABL transactions, potentially limiting market participation.
Despite these challenges, panellists remained optimistic about long-term growth prospects. Europe’s private credit market still lags the US in scale and penetration, leaving significant room for expansion. Participants pointed to growing demand from institutional investors, particularly from the Middle East, Asia and the US, as evidence that international appetite for European private credit continues to strengthen.
The panel concluded that while Europe’s market may not yet rival the scale of the US, the continued development of ABL structures, securitisation vehicles and alternative financing solutions positions the sector for substantial long-term growth.
