The demand for private debt has reached new heights in Europe, according to research from Neuberger Berman.
The firm’s most recent European Fund Selector Study found that this year 47% of respondents were planning to boost their private debt allocations.
This is up from 19% the year before.
Average allocations to the asset class were found to be largely similar across European markets, but were particularly high in Spain and France with responses of 67% and 65%, respectively.
This was part of a wider trend towards private assets in general.
Neuberger Berman also gauged investors’ motivations for increasing these allocations.
Greater portfolio diversification was picked as the most popular driver, by 74% of respondents.
The higher return potential of such assets was highlighted by 60% of respondents.
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However, risks were still flagged as considerable by respondents.
Over half (57%) of respondents still highlighted liquidity as a concern when investing in private assets.
A lack of transparency (41%) and high minimum investments (36%) were also frequently mentioned hurdles.
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“In the current volatile macroeconomic environment, the resilience and diversification that private markets can provide are more valuable to clients than ever,” said José Cosio, head of intermediary for global ex US at Neuberger Berman.
“This study shows that in Europe so called “alternatives” are now mainstream and have become an indispensable tool in the portfolio of fund selectors seeking to meet their investment objectives.”
This research chimes with a report released earlier this week by Apollo, that forecasts Europe’s private debt market as having the potential to rival the US.
