Phoenix’s Jack Edwards on opportunities in European private credit

Ahead of DealCatalyst’s European Private Credit Conference on Direct Lending, Jack Edwards (pictured), head of structured credit and alternatives at Phoenix, discusses the key areas of interest in private credit for one of the UK’s largest insurers, as well as the current macroeconomic backdrop for the asset class.

ACI: Can you tell us about your role at Phoenix and the key areas you focus on?

Jack Edwards (JE): As head of structured credit and alternatives at Phoenix, I am responsible for our equity release mortgage franchise, our origination and execution in structured credit within our matching adjustment portfolio and supporting our policyholder book in allocating to structured credit and alternatives.

It is a varied role and one that involves collaboration across our private markets team, working closely with Manuel Dusina, head of real assets and Cedric Rozier, head of private credit.

ACI: Beyond direct lending, where do you see the biggest growth opportunities in private credit right now? Are there specific areas of the market that are becoming more interesting to you?

JE: There are two areas where we expect to see exciting opportunities emerging in the near term.

The first is fund-level financing for top tier asset managers, enabling them to do more of what they do best. We have seen this function of capital deployment more broadly across private markets in the last few years. It enables Phoenix to provide capital indirectly to segments of the economy that otherwise would be difficult to finance.

Secondly, we are also looking closely at asset-backed finance (ABF) and how we can access the asset class in a format that suits our matching adjustment portfolio. This provides diversification, front loaded cash flows and good structural protections, when done in the right way.

More broadly, the capital required to build the infrastructure to support hyper-scalers and their artificial intelligence ambitions is huge, McKinsey quotes $7tn (£5.1tn) by 2030. This level of investment naturally means there will be a role investors like Phoenix. We haven’t seen a structure yet that we like enough to invest, but we are highly focused on the sector and the opportunities that are evolving over time.

ACI: On the structured credit side, are there particular areas that you are finding especially interesting at the moment?

JE: We are spending a large amount of time ensuring that we are ready for the implementation of Solvency UK reform and the finalisation of our ‘highly predictable’ framework. This will enable us to participate more widely in the structured credit universe.

Initially, this will likely take the form of senior tranches in collateralised loan obligations (CLOs), but it will be a framework that opens up areas of structured credit that have not previously been accessible, due to the prepayment dynamics.

ACI: Where has Phoenix Group deployed capital across these strategies so far, and do you anticipate increasing allocations to any of these areas?

JE: Our private credit team worked extensively with several top-tier asset managers throughout 2025, to deliver innovative financings. I would expect this to continue, with allocations to areas such as digital infrastructure and CLOs growing in 2026 and 2027 as a proportion of our total deployment.

ACI: Looking ahead, how do you expect Phoenix Group’s focus across the private credit and alternatives landscape to evolve over the next few years?

JE: In some respects it is easier to say what won’t change! We will continue to focus on underwriting, structure, downside protection and embracing complexity.

One of the key lessons of the last few years has been to focus on having a great toolkit that can be applied in various situations. That being said, it does feel as though the general trend of bank retrenchment along traditional lending lines will continue, generating opportunities for nimble market participants.

We are also excited about the Mansion House Accord and providing our savers with access to private markets, including real assets, private equity and private credit.

ACI: Given some of the recent negative press around private credit, do you think there are any “cockroaches”?

JE: It’s difficult to say whether we will see more examples of challenges within the sector, but these events come at a time when credit spreads are historically tight.

These recent events serve as an important reminder of the need for rigorous governance, thorough due diligence and avoiding speedy processes around complex transactions. Despite default rates remaining contained and metrics appear broadly stable we do expect to see further dispersion in performance and some deals underwritten in 2020-2021 will inevitably underperform.

ACI: What do you think is the most misunderstood aspect of private credit among institutional investors today?

JE: Homogeneity. There can be a tendency to underplay the dispersion amongst managers and asset classes. There is no real substitute for good underwriting.

ACI: How is the current macroeconomic backdrop shaping the market for private credit deals?

JE: It would be unrealistic to not describe this as a tough operating environment! High levels of macroeconomic and global uncertainty are largely playing out in the swap spreads of sovereign bonds, while actual ‘credit’ spreads remain close to all time tights.

This coupled with a continued flow of capital into the sector, has made deal screening and selection even tougher. Our continued experience is that our favourite and best deals are those we have sourced ourselves, where we have provided significant structuring input and kept the lending group small or bilateral. Sticky inflation could present a headwind to a level of deal activity that is only just picking up and put pressure on some balance sheets calibrated for leverage when rates were close to zero.

ACI: How does the outlook for European alternative credit compare with other regions, and where do you see relative value within Europe?

JE: Europe remains a core area of deployment for us. In deals where banks are not the primary source of financing, we tend to see a better ILP than in the US. This is due to inherent complexity of local laws, smaller niche markets and less crowding. We have deployed capital across the biggest economies in Europe and are currently widening our scope.

ACI: With DealCatalyst’s 3rd Annual European Private Credit Conference on Direct Lending approaching, what topics are you most looking forward to discussing, and what are you hoping to take away from the event?

JE: It will be really interesting to understand how peers are addressing some of the current macro challenges, where they see the growth of the European private credit market going and how managers are looking to engage with BPA investors post-Solvency UK.