Private Credit 2.0: why growth is inevitable
In Preqin’s European Private Markets report 2025, Zach Lewy, CEO and CIO of Arrow Global, argues that the fragmented nature of Europe’s mid-market creates compelling opportunities for private credit investors. The continent’s complexity, marked by 44 distinct local markets, requires granular, locally-informed strategies. Arrow’s business centres on building dominant platforms in specific geographies and sectors, allowing for differentiated access, underwriting and operational execution.
A major theme is the growing relevance of asset-based lending (ABL), where private credit still holds a relatively small market share compared to corporate lending. While barriers to entry are high due to regulatory and operational demands, the sector offers significant untapped potential across real assets such as housing, infrastructure and leasing.
The article also discusses shifts in asset valuations and investor preferences. Structural trends, such as student housing growth or office market stagnation, are closely analysed to determine whether changes are cyclical or permanent. Technology, particularly AI, is highlighted as a critical enabler of scale, transparency and customisation.
In distressed and special situations, Zach emphasises the extended resolution timelines in Europe, advocating patience over cycle timing. Overall, Arrow sees sustained growth in private credit, driven not only by structural regulatory changes but also by banks’ declining appetite for complexity in asset classes that demand operational depth and flexibility. This is not viewed as a temporary trend but as part of a long-term reallocation of credit origination away from traditional lenders and into the hands of private capital providers.
“Europe’s mid-market is profoundly divided, but that fragmentation creates opportunity.”
“Success in these markets depends heavily on people, infrastructure and regulatory capability.”
“Patience and persistence are more important than speed in European distressed investing.”
Read the full article here
Zach Lewy
CEO, CIO, Fund Principal
Zach has more than 25 years of executive experience in investment management and asset servicing. He founded Arrow Global in 2005 and has since led the business as Group CEO and CIO, transforming it into a leading Pan-European investment manager specialising in private credit and real estate. Under Zach’s leadership, Arrow manages more than €110 billion of serviced assets across Western Europe and generates alpha across alternative asset classes, including opportunistic credit, real estate, and lending.
Zach has supervised over 3,000 deals at Arrow and plays a key role as lead Principal in Arrow’s fund manager. Prior to founding Arrow, he was an Officer of Sallie Mae, a Director at Vertex (the BPO division of United Utilities), and a Founder and Executive Director of 7C (a U.K. BPO company acquired by Vertex). He has also served as Chair of the U.K. Debt Buyers Association and the Chair of SCOR. In 2010, he was named an Ernst and Young Entrepreneur of the Year.
Zach graduated from Princeton University with a BA in Economics with Honours and a Certificate in Applied and Computational Mathematics with Honours.