The European Fund and Asset Management Association (EFAMA) published a Market Insights report on the rise of private debt and loan-originating funds (LOFs) in Europe, highlighting LOFs as a main driver of market growth as the European Union moves toward harmonised loan origination requirements under the revised Alternative Investment Fund Managers Directive (AIFMD). The report also notes that the European Securities and Markets Authority (ESMA) has proposed regulatory technical standards that recognise differences across LOF models and the need for tailored regulatory approaches. EFAMA estimates new EU private debt investments expanded sharply from 2013 to nearly EUR 75 billion in 2024, supported by investor demand for long-term yield and growing complementarity between private debt and private equity. Europe remained the second-largest global private debt hub, with US-domiciled funds capturing over 60% of global private debt commitments in 2020–2024 while Europe’s share fluctuated between 21% and 24%. LOFs accounted for around two-thirds of private debt commitments in 2020–2024, with direct lending strategies the majority, and commitments remained concentrated in a few financial centres, including Luxembourg at 57% of commitments in 2024. New harmonised EU rules on loan origination in funds are set to apply from April 2026 as part of the AIFMD review.

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