European private credit booms as private equity firms are forced to refinance
European private credit lending reached €63.2bn in H1 2023, up from €40bn in H1 2022, driven by private equity refinancings due to slow exits. Q2 saw a 25% YoY drop to €28.4bn as large firms turned to public debt markets. Ares led with 31 deals, 7.8% of the market. Analysts expect more refinancings if M&A activity remains slow.
How this was made
The 30-second read
Why it matters
The surge indicates robust demand for alternative financing, but a Q2 slowdown suggests sensitivity to M&A cycles.
Market read
The data underscores the growing importance of private credit in Europe, with implications for mid‑market lenders and investors seeking yield.
What to watch
Potential regulatory changes in Europe could affect private credit fund leverage and fundraising capacity.
Background
European private credit lending reached a record €63.2bn in H1 2026, driven by refinancing activity as private‑equity exits slow.
Ticker impact
Ares Management reported completing 31 new private credit deals, representing about 7.8% of the European direct lending market in H1 2026.
Modest upside potential if Ares raises additional capital or expands its fund offerings.
The firm’s market share is sizable but the news is a data point rather than a catalyst.
Market effects
European private credit market shows strong growth, but large‑cap borrowers are shifting to public debt, pressuring mid‑market lenders.
Higher private credit volumes may support European mid‑cap financing conditions.
Signals a broader shift toward private credit as banks retreat from riskier loans.
Counterpoint
If large‑cap borrowers continue to favor public markets, mid‑market private credit could face oversupply and margin compression.
Key entities
- Analytics PlatformDebtwire
Provider of the private credit market data cited in the article.
- Investment ManagerAres Management
Reported 31 new private credit deals, 7.8% market share.
