Private credit is becoming an even bigger deal in Europe than it has been in the US, according to Madelaine Jones, portfolio manager, European senior loan strategies at Oaktree Capital.
When asked whether private credit and particularly direct lending is now a big deal in Europe, she said it “may even be more of a big deal in Europe than it was in the US”.
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“I guess [this is ] because the array of different geographies means that [there are] probably more of the small, midsize company, which have been historically banked by small, midsize regional banks,” she explained.
“When I look at companies now, they’re north of 600m EBITDA coming to our market.
“When I think about that where we were decade ago or so, the 50m size EBITDA company was really the mainstay of the broadly syndicated market. Now, that’s gone to direct lending, and they’ve gone to direct lending because there they structure them well and appropriately for that quality market.”
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She added that the economic situation in Europe is more favourable for the companies that the firm lends to than the US right now.
“We have in Europe a less difficult inflation, inflation is more under control. I think that means the ECB can be more relaxed about monetary policy, and indeed has reduced rates, which is a good positive backdrop for the companies that we lend to,” she said.
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