Private credit lenders seize the moment in Europe

Private debt has enjoyed sustained success in recent years, with private credit firms stepping in to fill the void left by the retreat of banks from their traditional lending role. The outlook for the asset class in Europe remains strong, as firms continue to find compelling opportunities, even in sectors that face market headwinds.

A persistent supply-demand imbalance in the housing market across most European countries means that residential real estate is a particularly attractive sector for lenders. Changing work patterns are also giving a long-term boost to parts of the hospitality real estate sector, with southern European markets able to take advantage of a boom in demand.

In this episode of the Private Debt Investor Podcast, Zach Lewy, Founder, CEO, and Chief Investment Officer of Arrow Global, says how asset-backed lending enables private credit firms to minimise risk while capitalising on emerging opportunities. Success, he notes, hinges on maintaining strategic discipline in a landscape ripe with potential.

“If you’re a lender against high quality collateral that has good liquidity and hence exits are possible… you can benefit from the higher interest rates… I’m bullish for that style of private lending.”

“The behavioural pattern of remote working has had a much more prolonged effect in favour of hospitality assets… it’s been a very favourable dynamic.”

“The fundamental discipline in all asset-backed investing is… How liquid is it? How do I add value?… That fundamental discipline applies across all of what we do.”