European direct lending in 2025 rocketed past volumes seen in previous years to set new records in both issuance and activity. Direct lenders deployed a record EUR 115bn in 2025 – a 23% rise in deal volumes compared to 2024 and well above the prior four-year annual average deal volume of EUR 83.6bn, according to Debtwire‘s 2025 European Direct Lender Rankings Report.

Deal count for the year, at 1,357 transactions, likewise set a new record for the region, marking an 11% increase from the previous high of 1,220 deals in 2024 and decidedly above the previous four-year annual average deal count of 949 transactions.

These figures show how private debt has cemented its place as an integral part of the financing landscape in Europe despite an overall challenging environment for dealmaking, with direct lenders playing an increasingly key role in supporting leveraged buyouts (LBOs), refinancings and other transactions alongside the traditional syndicated loan and high-yield bond markets.

Sponsor-led dealmaking remains an important driver for the private credit industry’s growth in Europe, with around 26% of direct lending proceeds deployed towards new-money LBOs in 2025. In the syndicated loan market, by contrast, new LBO issuance accounted for only around 10% of BSL proceeds last year, indicating that private credit remains the preferred source of capital for some sponsors when executing new platform acquisitions.

Including refinancings and add-on financings, sponsor-backed situations accounted for nearly 75% of direct lending activity in 2025, in line with historic averages in the region, Debtwire data shows.

Margins on direct lending deals in 2025 meanwhile continued to trend downwards for much of the year. In 4Q25, the average margin on direct lending facilities fell to a near-record low of 521bps, down from 571bps in 3Q25, while net leverage in 4Q25 remained stable quarter-on-quarter at 4.7x EBITDA.

While private credit funds can still command a premium on price for speed and flexibility in dealmaking vis-a-vis the syndicated loan markets – where pricing stood at 381bps in 4Q25 – renewed competition with the BSL market and among the funds themselves have seen this pricing gap compress over the past year.

In terms of sectors, technology was once again the dominant industry, boasting EUR 34.7bn in direct lending issuance in 2025 and nearly the equivalent in lending volumes as the next two largest industries of business services (EUR 20bn) and healthcare (EUR 16.6bn) combined.

ESG-linked financing, on the other hand, continued its decline as a percentage of direct lending activity amid a broader, industry-wide blowback against sustainability-linked initiatives. In 2025, ESG-linked deals accounted for only EUR 10bn in direct lending issuance, down considerably from the highs of EUR 47bn and EUR 40bn in ESG financings seen in 2021 and 2022, respectively.

Against this backdrop of record deployment, direct lenders collectively had a robust year for fundraising in 2025 as well, raising a record EUR 58bn from investors and proving that the asset class’s appeal to limited partners (LPs) remains undiminished despite the occasional industry hiccup.

Ares Management pulled in the largest direct-lending fundraise of the year, hoovering up EUR 17.1bn from LPs and institutional investors in 2025 for Ares Capital Europe VI. This is now also the largest direct lending fundraise on record, just ahead of ICG’s with their USD 17bn (EUR 15.2bn at the time) fundraise for ICG Senior Debt Partners V in 2024.

European Direct Lender Rankings – 2025

Given its fundraising prowess, Ares perhaps unsurprisingly maintained its pole position in the European direct lending market, topping Debtwire’s 2025 European Direct Lender Rankings across multiple categories as well as geographies.

Several direct lenders have also carved out top spots for themselves in specific pockets of the market, like small cap or ESG, suggesting an increasing degree of specialisation in terms of fund strategy and deployment as the industry matures.

Ares came out on top in the Europe-wide direct lender rankings for 2025, completing 53 new-money deals and capturing 5.63% of total market share. Following closely were Blackstone Credit, which closed 51 transactions with a 5.4% share, and Arcmont, which rounded out the top three with 46 deals and a 4.89% share.

Including add-on financings, Ares accounted for an even larger share of activity, with 99 deals representing 7.7% of the market. Arcmont meanwhile shot up to second place here with 74 deals and a 5.7% market share, swapping spots with Blackstone Credit, which came in third with 67 transactions including add-ons and a 5.2% share.

A different set of lenders dominated the rankings when it comes to sustainability-linked financing. Here, Eurazeo came out on top with 37 ESG-linked deals in 2025, capturing nearly one-quarter of the overall market at 23%. Pemberton came in second for ESG-linked deals with 18 transactions and 11.2% of the market, followed by Fiduciam with 15 deals and a market share of 9.3%.

Over in the large-cap segment, Goldman Sachs Private Credit prevailed over its rivals, with 30 transactions giving it a market share of 17%. Blackstone Credit came in second with 21 deals and an 11.9% market share, followed by Arcmont with 20 deals and an 11.3% market share.

In the mid-market segment, Ares once again emerged as the industry leader with 41 deals and a 12% market share. Coming in second in the mid-market is Eurazeo, with 27 deals and a 7.9% market share, while Arcmont rounds out the top three with 26 deals and a 7.6% market share.

CVI topped the small-cap rankings with 25 transactions and a 12.8% share. Fiduciam and Muzinich tied for second with 15 deals and a 7.7% market share a piece, while fourth place was taken by DunPort Capital claiming 13 deals and a market share of 6.6%.

In junior debt financing, Arcmont came in first place with six deals and a 15.4% share of the market. Dutch Mezzanine Fund and Oquendo Capital tied for second with five transactions and a 12.8% market share a piece, while Carlyle Group, CIC Private Debt, and PSP Invest shared fourth place, with each claiming four deals and capturing a 10.3% share of the market.

2025 Regional Breakdown

In the UK and Ireland, Ares again came in first place with 27 deals, giving it a 9.6% share of the market. Apollo followed in second place with 21 deals and a 7.5% market share, while Barings, Blackstone Credit and Investec Private Debt came in a three-way tie for third with 15 deals and a market share of 5.4% a piece.

The rankings for the German-speaking DACH region (Germany, Austria, Switzerland) meanwhile saw Ares come in a three-way tie for first place along with Berenberg and Bright Capital, with each lender claiming nine deals and a market share of 6.2%. Apera and Investec Private Debt tied for fourth with eight deals and a 5.5% market share each.

In France, Eurazeo came out on top with 20 deals and an 11.5% market share. Tikehau followed closely behind in second with 17 delas and a market share of 9.8%, while CIC Private Debt placed third with 15 transactions, capturing 8.6% of the market.

In Benelux, Arcmont led the pack with eight deals, representing a 7.8% share of the market. Ares and Blackstone Credit tied for second at seven transactions and a 6.8% market share each, while Muzinich came in fourth with six deals and a 5.8% share of the market.

Over in the Nordics, TureInvest emerged in first place with nine transactions and a 15.5% share of the market. Apollo and Goldman Sachs Private Credit tied for second place, with each lender executing six transactions and claiming a 10.3% share of the market. Arcmont came in fourth with five deals and a market share of 8.6%.

In Southern and Eastern Europe, CVI led with 25 deals and a 13.6% market share. Muzinich followed in second with 14 transactions and a 7.6% share of the market, while Blackstone Credit came in third with 13 deals and a 7.1% share of the market.

Debtwire’s direct lender rankings highlight the key players in the private debt market. The report contains active direct lender fund rankings, along with market analysis.