European Private Debt Hits $79.4B, U.S. Spreads Widen to 525 bps
HLI•European private debt funds raised $79.4 billion in 2025 versus $55.9 billion in 2024, with average direct lending spreads in Europe at 509 bps for the 12 months to April 2026, down from 522 bps in 2025. U.S. spreads have widened by 50–100 bps YTD to about 525 bps, while European margins remain stable.
1. Fundraising Growth in Europe
European private debt funds raised $79.4 billion in 2025, up from $55.9 billion in 2024, anchored by Ares Management’s $17.7 billion Ares Capital Europe VI and CVC Capital Partners’ $12.2 billion direct lending vehicle, reflecting intense competition and record dry powder.
2. Spread Dynamics Across Regions
U.S. direct lending spreads have widened by 50–100 bps since the start of the year to around 525 bps, while European spreads averaged 509 bps over the 12 months to April 2026, down from 522 bps in 2025, signaling stable pricing in Europe despite a slower M&A backdrop.
3. Implications for Houlihan Lokey
Stable European spreads could sustain advisory fee pipelines for Houlihan Lokey’s European Capital Solutions group, whereas widening U.S. spreads may redirect borrower demand toward Europe, intensifying competition for mid-market deals and influencing the firm’s deal flow dynamics.
