Loan-originating funds are a key driver of private debt growth in Europe, according to a new report.
The report, ‘the rise of private debt and loan originating funds’, by the European Fund and Asset Management Association (EFAMA), found loan-originating funds (LOFs) are a key driver of private debt growth, accounting for around two-thirds of private debt commitments in 2020–2024, with direct lending strategies being in the majority.
LOFs remain concentrated in a few financial centres, with Luxembourg accounting for 57% of commitments in 2024.
It also found new EU private debt investments have expanded sharply since 2013, reaching nearly €75 billion in 2024, supported by investor demand for long-term yield and the growing complementarity between private debt and private equity.
Overall, Europe remains the second-largest global private debt hub after the US. US-domiciled funds captured over 60% of global private debt commitments during 2020–2024, while Europe’s share fluctuated between 21% and 24%.
Vera Jotanovic, senior economist at EFAMA, said: “Our analysis shows that private debt fundraising has expanded significantly over the past decade and is increasingly shaping Europe’s market-based finance landscape. Loan-originating fund strategies now account for around two-thirds of private debt commitments, highlighting their growing role in channeling long-term capital to businesses, infrastructure and real estate across Europe.”
