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Private debt in Europe: Q4 2015

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Dry powder held by Europe-focused funds currently stands at a high of USD42 billion, led by particularly strong direct lending fundraising since 2013. As banking regulation and quantitative easing in the Eurozone have just begun to come into effect, managers in the region are increasingly dedicating resources and efforts to access lending opportunities in the underserved middle-market segment. This trend is expected to continue, fuelled by capital from institutional investors seeking strong returns through senior-focused vehicles in the direct lending segment.

Fifty-five percent of Europe-based investors are allocating to the asset class from private equity allocations, a figure which has been driven down in recent years as investors are increasingly moving towards creating separate private debt allocations as has been the case in the US and has been slightly slower to take hold in Europe. Interestingly, distressed debt fundraising has already surpassed 2014 levels for Europe-focused funds, with USD5.6 billion in commitments secured so far in 2015.

Preqin’s recent factsheet brings together the latest data to provide an overview of the European private debt market, looking at dry powder, fundraising, the largest funds currently in market and more.

View the full factsheet here.

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