Direct lending is a promising market in Europe, but does it offer better opportunities than its more-established US counterpart? Here we assess the differences between the two and present our view on what it takes to invest successfully in European loans.
Europe: New kid on the bloc Europe’s emergence as a direct lending market is still relatively recent. The changing regulatory landscape in the post-financial crisis era transformed loan markets. New capital adequacy rules, amplified by the Capital Requirements IV directive under Basel III, have forced banks to reduce risk and therefore the size of their loan books.