Alternative Views – Annual Private Credit Survey 2025

Credit professionals entered Q2 2025 with optimism despite the challenges. Deal volumes have risen 8.5% over 18 months, and 95% of respondents expect continued growth, projecting a 5.8% increase this year versus the past three years. Compared to last year, optimism is even higher – especially among borrowers, while debt advisers remain more cautious.

Risk aversion is up, with 47% noting terms now favour lenders more. Distressed debt is the fastest-growing strategy, and over 80% expect loan defaults to rise, with private credit fund managers particularly concerned.

Global turmoil may lead to lower interest rates. If bond markets stabilise and credit spreads narrow, private credit is likely to benefit more than bank lending or bond issuance. 80% of respondents expect private credit to attract flows from banks and bonds in such a scenario.

While short-term prospects remain unclear, industry experts are optimistic about the next five years. They expect strong borrower demand and increased capital from investors—especially pension and sovereign wealth funds—to boost private credit volumes. Most also anticipate more collaboration between private equity and private credit managers. The market is seen as underserved, particularly for mid-sized private companies, with rising competition expected to ease risk aversion and lead to less restrictive loan terms for borrowers, ultimately spurring medium-term growth.

Integration of the European private credit market is a clear theme. 90% of professionals expected to see more cross-border activity, though borrowers tended to be a little more parochial in their view.

Regulation remains the industry's main challenge. Most professionals seek improved, though likely stricter, regulation rather than reform. While compliance confidence is strong, there's room for better support, potentially through outsourcing. Respondents believe high-net-worth investors are informed about private credit's complexity, but concerns persist over possible mis-selling and its reputational risks.

Loan agents are becoming increasingly important. One third of professionals already work with them but five out of six expected to do more business. The key barriers to greater adoption of loan agents were a perceived loss off transparency and control, while speed and responsiveness were considered the most valuable qualities loan agents could possess. All this suggests the development of digital platforms could help grow the role of loan agents significantly.

Our new annual survey asks key professionals across the European private credit industry for their views and insights on how the market is developing, where they see the best prospects for growth and how they judge the opportunities against the risks.

Download our 2025 Private Credit Survey Report below: