Ocorian: Cross-border European deals powers private credit growth
Cross-border European deals are contributing to strong growth in private credit compared with last year and the previous three years, new research from Nordic Trustee, part of global capital markets services provider Ocorian, shows.
Around 90% of private credit professionals surveyed across the UK & Ireland, Germany, Switzerland, Benelux, the Nordics and Eastern Europe say cross border direct lending deals are increasing in Europe with 37% saying they are increasing significantly.
The original study with professionals working across private credit and debt fund management, investing in private debt, private equity and corporates using private credit as a source of funding and for debt advisory firms, carried out in March shows they are predicting strong growth this year. The study was re-run again a few weeks after 'liberation day' to see if the recent volatility and change in capital market sentiment had affected respondents’ growth expectations for the year ahead.
The answer, maybe surprisingly, was that private credit investors do not seem particularly concerned. Prior to 'liberation day' respondents were expecting 11% growth this year and when the research was re-run in light of the market unrest their growth expectation was marginally reduced to 9.9% for 2025.
The technology sector is expected to see the most growth in direct lending in Europe in the next three to five years ahead of real estate and energy and renewables. The infrastructure and healthcare sectors are ranked fourth and fifth ahead of consumer goods and project financing.
The biggest drivers of direct lending growth, according to the research, is increased demand for capital, which was ranked first when professionals were asked to rank their top three. Falling interest rates, lack of appetite from traditional bank lending and uncompetitive terms were ranked second and third.
