(Bloomberg) -- European private credit specialist Park Square Capital has raised €3.4 billion ($3.8 billion) for a new direct-lending vehicle, according to its managing partner Robin Doumar.
Park Square’s European Loan Partners II includes a joint venture with Sumitomo Mitsui Banking Corp. It will lend to private equity-owned mid-market businesses across Europe.
The private credit market has clocked up rapid growth as investors known as so-called limited partners line up to get a slice of loans that promise higher yields and often tighter safeguards than those available from public debt.
“Five years ago a lot of the questions were around the basic mechanics of making a loan,” Doumar said in an interview. These days, investors “are focusing on the track record of fund managers and net performance,” he said.
Last year the private credit industry swelled to $1.7 trillion, up from about $500 billion in 2015. Meanwhile, competition is heating up among direct lenders and that’s only getting more intense as central banks embark on rate-cutting cycles.
The good news is that deal flow is also set to increase, according to Doumar. His firm has previously lent money to Ambassador Theatre Group Ltd. and Trescal.
“Pricing has come in quite a bit, but the flipside is this is driving a higher level of transaction activity,” he said.
©2024 Bloomberg L.P.
