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Growth, Resilience, Returns
Private credit has seen substantial growth over the past decade, establishing itself as an important and expanding part of investor portfolios, with global private credit assets under management (“AUM”) growing to c.$1.7Tn in 2024 from c.$260Bn in 2008.1
As a sub-segment, European private credit has firmly established itself as a compelling and potentially attractive market in its own right, with AUM now approaching $500Bn. Growing nearly 2x faster than its U.S. counterpart, it has now expanded to represent approximately 30% of the global private credit market.2
In an environment of elevated macroeconomic and geopolitical uncertainty, ever increasing banking regulations, and a possible end to “American Exceptionalism,” European private credit offers a compelling diversification opportunity.
U.S. investors allocating to European private credit are not required to sacrifice return potential. Capital deployed in European private credit could offer higher average credit spreads while retaining the benefits of the U.S. dollar (“USD”) base rate through currency hedging. Moreover, European investors can allocate to their domestic markets and protect themselves from potential USD depreciation.
Through a comparative lens of European and U.S. private credit markets, this publication seeks to highlight how combining U.S. and European private credit allocations enhances diversification, resilience and return potential for investors.
For the Full Paper, Click on the Link Below.
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