European Private Credit: Still an All-Weather Asset Class?

European private credit continues to look resilient, with strong borrower demand, limited bank lending capacity, and an enduring illiquidity premium supporting the case for the asset class.

Recent concerns around headline defaults, AI-driven disruption, and comparisons with 2008 have unsettled sentiment, but they do not appear to change the core supply-demand backdrop. The market still offers attractive income potential for investors who can tolerate lower liquidity and higher risk.

That said, selectivity matters as credit conditions evolve and dispersion between stronger and weaker borrowers widens. For long-term investors comfortable with volatility and complexity, private credit may still offer a compelling role in diversified portfolios.