European private credit had a breakout year in 2025, with fundraising reaching a record EUR 56 billion through the first nine months. The figure represents a 17% increase over 2024's full-year total of EUR 48 billion.

European-focused funds accounted for 35% of all private debt fundraising globally during the period, up sharply from roughly 24% in each of 2023 and 2024. By contrast, North American funds raised just USD 52 billion over the same nine months, representing 24% of the global total and a significant decline from the approximately 50% share seen in the two preceding years.

Two mega-funds anchored the European fundraising total. CVC's European Direct Lending strategy raised EUR 10.4 billion, while Ares Capital Europe collected EUR 17.1 billion. These large-scale closes demonstrate institutional appetite for established managers with proven track records in the region.

The data suggests a structural rather than cyclical shift in European capital markets. As Basel IV implementation progresses, market participants expect a significant migration of lending activity from banks to private credit funds. Bank lending currently accounts for approximately 70% of total corporate lending in Europe, a figure that is expected to decline in the coming years.

European private debt managers have benefited from spread premiums of 25-50 basis points over their US counterparts, reflecting the smaller and more fragmented nature of the regional market. These premiums have attracted capital from global institutional investors seeking enhanced yields.

Industry forecasts suggest that private credit fundraising will continue to accelerate in 2026, with capital raised expected to exceed the 2025 full-year total by approximately 20%. Semi-liquid funds have also gained traction, with European vehicles now managing over EUR 20 billion in aggregate.

The growth trajectory positions European private credit as an increasingly important component of institutional portfolios, with allocation trends likely to persist as the regulatory landscape continues to favor alternative lenders.