Evergreen Private Credit in Europe - Market Snapshot 2025

Amid strong growth in private market evergreen funds across Europe, Borgline examined 37 European-domiciled funds with a primary private credit strategy, covering over €22bn in NAV. Where certain fund characteristics were not available, the analysis reflects best-available information at the time of review.

Market participants have increasingly adopted evergreen structures as a preferred vehicle for broadening wealth client’s access to private markets. In parallel, the ELTIF 2.0 regulations, which apply from 10 January 2024, have supported private credit ELTIF launches across the European market by expanding the eligible asset universe, introducing greater flexibility in portfolio construction, and widening the investor base.

The observed universe is disproportionately concentrated in large, established brand name funds. While only 29% of private credit funds manage more than €1bn, these vehicles account for over three quarters of total AUM across Borgline’s tracked universe. Larger funds are also more frequently structured under the UCI Part II regime and only infrequently employ ELTIF wrappers. By contrast, the sub-€500m segment contains the majority of funds by count, yet represents just over 15% of aggregate AUM.

Given private credit’s income-generative characteristics and the significant balance-sheet capacity of managers, evergreen vehicles are frequently able to deploy capital predominantly via directly originated transactions and/or co-investments - accounting for the primary investment approach for more than 90% of the tracked funds - rather than relying on primary or secondary fund commitments.

Nearly 60% of the funds in the universe target European private credit exposures, while a smaller proportion, mainly sponsored by large US managers, focuses on North America (18.9%). The remaining 21.6% pursue a global allocation approach without a single primary target region.

Standard liquidity terms in private credit continue to reflect monthly subscriptions paired with quarterly redemptions. Relative to other private market strategies, lock-up provisions are generally less restrictive, most commonly structured as a one-year soft lock-up with a 2% early-redemption fee, or with no lock-up requirement.

Fee comparability across evergreen structures is limited by differences in fee bases, share-class terms, and the use of layered fee arrangements. Within the European private credit universe, management fees most commonly fall in the range of 1.0% to 1.6% of NAV. In certain cases, additional servicing and/or distribution fees apply and are charged separately rather than being paid out of the management fee.

Performance fees in private credit are frequently structured as a two-component arrangement. One component is charged on net investment income, typically subject to a 4% to 5% hurdle and a full manager catch-up. A second component is charged on net realized capital gains, commonly without a hurdle. Across the universe, headline performance fee rates generally range from 7.5% to 12.5%.

Equal-weighted performance across Borgline’s tracked European Private Credit universe delivered a 6.89% annualized EUR return over the two-year period ending 31 October 2025. Over the same horizon, the universe outperformed the Morningstar LSTA US Leveraged Loans Index by 3.14 percentage points and underperformed the ICE BofA Euro High Yield Total Return Index by 2.8 percentage points, on an annualized basis.

In aggregate, private credit vehicles exhibited annualized volatility of 4.26%, compared with 2.85% for Euro High Yield and 7.96% for US Leveraged Loans.

Borgline’s review of 37 European-domiciled evergreen private credit funds (over €22bn NAV) finds most launched in the past two years, supported by rising wealth access and ELTIF 2.0. AUM is concentrated among large managers, portfolios largely rely on direct origination/co-investments, and most strategies focus on Europe with generally moderate liquidity terms and varied fee structures. Over the two years ending 31 October 2025, the equal-weighted universe returned 6.89% annualized in EUR with 4.26% volatility, beating U.S. leveraged loans but trailing Euro high yield on an annualized basis.

1. Borgline database

2. Morningstar LSTA US Leveraged Loan TR USD; https://indexes.morningstar.com/indexes/details/morningstar-lsta-us-leveraged-loan-FS0000HS4A?currency=USD&variant=TR&tab=overview

3. Ice Data Indices, LLC, ICE BofA Euro High Yield Index Total Return Index Value [BAMLHE00EHYITRIV], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/BAMLHE00EHYITRIV