Regulators are expected to toughen up on private credit

• Four out of five private credit executives expect increased regulation in the next year to 18 months

• Just one in three questioned say private credit fund managers in their jurisdiction are very well-equipped to meet regulations

Private credit executives are expecting regulators to take a tighter grip on the market and warn that private credit fund managers are not as well-equipped to cope as they should be, new research from Nordic Trustee, part of global capital markets services provider Ocorian, shows.

Around 79% questioned expect increased regulation in the private credit market in the next 12 to 18 months with 15% predicting a significant increase.

The research with private credit executives across the UK & Ireland, Germany, Switzerland, Benelux, the Nordics and Eastern Europe found just one in three (33%) say private credit fund managers are very well-equipped to meet regulations in their jurisdiction.

Around 65% say private credit fund managers are quite well-equipped to meet regulatory standards. Just 2% worry they are not very well-equipped, the study with professionals working across private credit and debt fund management, investing in private debt, private equity and corporates that use private credit as a source of funding, and at debt advisory firms shows.

The survey with private credit executives found they do not rate current private credit regulation in their jurisdiction highly. Just 37% say it is fit for purpose while 56% say it needs improvement involving changes or less regulation. Around 7% say there is not enough regulation in their jurisdiction.

Cato Holmsen, CEO at Nordic Trustee, said: “Regulation of private credit will help drive standards and grow investor confidence, and executives working in the market clearly expect it to increase in the immediate future.

“Regulation, however, has to strike a balance so that growth in the market in response to strong demand is not damaged while investors are also protected. Our study shows private credit executives want improvements whether it is changes to existing regulation or less regulation.”

Abi Reilly, Partner and Practice Lead at Bovill Newgate (an Ocorian company), commented: “Whether in Europe or the UK, regulators are tightening their gaze on alternative investment sectors like private credit. AIFMD 2.0 is one of the clearest signals yet of that shift in Europe, and the FCA’s own consultation activity hints at similar priorities. Whether this next wave of reforms will deliver the transparency, consistency, and investor protection it promises, while maintaining room for innovation, is something we’ll see play out over time. What’s certain is that the private credit space is entering a more scrutinised phase, and readiness will become a defining feature for successful managers.”

With over 30 years’ expertise in the bond and loan markets and a track record of facilitating 14,000 transactions over the years, Nordic Trustee brings an unparalleled depth of knowledge to support bond and loan transactions in the UK and Europe.

It differentiates itself through its proprietary technology, extensive restructuring expertise which includes more than 450 restructurings and 2,000 noteholder meetings, and a problem-solving approach that streamlines complex transactions for issuers and investors alike. Nordic Trustee is committed to delivering best-in-class trustee and loan agency services tailored to the needs of issuers, investors, and intermediaries.

* In March 2025, Ocorian commissioned an independent research company, PureProfile, to interview 210 private credit professionals working across private credit and debt fund management, investing in private debt, private equity using private credit, borrowers using private credit as a source of funding and debt advisory. Respondents were based in the UK and Ireland, Germany, Switzerland, Benelux, the Nordics and Eastern Europe