European direct lending is on track to shatter volume records in 2025, even as direct lending activity contracted quarter-on-quarter in 3Q25 amid a summer slowdown in M&A, according to Debtwire‘s 9M25 direct lender rankings report (PDF).

Direct lending volumes in Europe in 3Q25 amounted to EUR 27.4bn across 310 transactions, the highest on record for a third quarter, yet below the all-time high of EUR 37.6bn in direct lending volumes across 351 deals registered in 2Q25, Debtwire data shows.

In the first nine months of 2025, direct lending volumes totalled EUR 84.9bn, representing a 14% increase from the EUR 74.4bn raised in 9M24, and stood well above the average of EUR 64.4bn in lending volumes seen in the four previous nine-month periods.

Big-ticket items such as French crematorium Funecap’s EUR 1.7bn unitranche and capex facility, the largest direct lending deal in 3Q25, or Adevinta’s record EUR 6.5bn refinancing of its existing EUR 4.5bn unitranche in 2Q25, are among the transactions propping up direct lending volumes even as the overall environment for dealmaking remains challenging in the region.

At 927 transactions, deal count in 9M25 is likewise up 5% year-on-year (YoY) and substantially higher than the average deal count of 697 transactions in the prior four nine-month periods, providing some relief for direct lenders keen to deploy pent-up capital against fierce competition from rival funds, as well as the public markets.

Direct lenders appear to have lost some ground against the latter in 3Q25, as institutional loan and high-yield bond issuances in 3Q25 amounted to around EUR 95.2bn, roughly on par with the EUR 94.6bn and EUR 95.9bn issued in 2Q25 and 1Q25, respectively, bucking the summer slump in lending volumes that afflicted private credit.

In terms of sectors, technology remains by far and away the most popular destination for direct lenders, accounting for around EUR 26.4bn in lending volumes in 9M25, nearly twice as much as business services, the second-largest sector this year at EUR 14bn in 9M25. Healthcare rounds out the top three with EUR 13.2bn in lending volumes.

Among direct lenders, Ares claimed the top spot in Debtwire’s 9M25 European Direct Lender Rankings, registering 38 deals and accounting for 6.2% of the market. Arcmont and Goldman Sachs Private Credit followed in second and third place with 34 and 32 deals, respectively, giving Arcmont a market share of 5.6% and Goldman a 5.3% share.

Including add-on financings, Ares likewise topped the charts in 9M25 with 72 deals, giving it a total market share of 8.3%. Goldman Sachs followed in second place with 53 deals and a market share of 6.1%, while Arcmont came in third with 52 deals and a market share of 6%.

When it comes to ESG-linked deals, Eurazeo comes out on top with 24 transactions and a market share of 25.8%. Pemberton follows in second place with 13 ESG-linked deals and a market share of 14%, while BNP Paribas Asset Management comes third with six deals and a market share of 7.5%.

In the large-cap space, Goldman Sachs takes the lead with 36 deals and a market share of 23.8%. Ares and Blackstone Credit tied for second place with 23 deals and a 15.2% share of the market apiece, followed by Arcmont with 19 large-cap transactions and a 12.6% market share.

When it comes to the mid-market, Ares once again claims the top spot with 29 deals and a market share of 17.7%. Arcmont clocks in at second place with 18 deals and a 11% market share, followed by Muzinich in third with 14 deals and a market share of 8.5%.

A different set of funds dominate the small-cap space, with CVI having a clear lead here with 15 deals and a 19.5% market share. Bright Capital, Muzinich, and Zenon Management come in a three-way tie for second place with six deals and a market share of 7.8% apiece.

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.

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