Vol 23 (2026) - Issue 3

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Private Credit in Transition? Divergent Continental Paths and Some Structural Opportunities Beyond the Cycle

Synopsis
The landscape of private credit has evolved dramatically over the past two decades, reshaping and improving access to financing for mid-market firms, and redefining traditional bank-lending dynamics. Mid-market firms' growth plays a big role in the recovery of the increasingly regionalized global economy, given they are typically less exposed to geoeconomic risks than their listed peers. As the private credit market is expanding globally, notable divergences are apparent between the United States and Europe, particularly in which type of investors have access to the market (the maturity
of retail distribution), and the way insurance business balance sheets are reallocating capital toward private markets. Divergence, however does not mute the argument for diversification for private credit markets. It is more interesting to understand differences and then explore how the same structural trends could impact each of the continental markets. In addition to outlining the implications from these divergent continental paths in private credit, this article discusses what opportunities in private credit there may lie beyond the current cycle.