Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTFrancesca Ficai, Nishant SharmaTue, June 23, 2026 at 3:04 PM GMT+2 7 min readEurope's private capital asset class has split into two markets that barely resemble each other, said advisers and fund managers at the SuperReturn International event in Berlin earlier in June. At one end sits a narrow band of prized assets drawing fierce competition from funds and lenders, while at the other there's a growing backlog of companies struggling to find a buyer."It's a bifurcated market," confirms Matthias Weissinger, partner at McDermott Will & Schulte. "There are very good assets that everyone is running towards, and that's driving down pricing and terms in the mid-market. Then there's a bunch of stuff that no one really wants to touch."Meanwhile, the deals in-between these two groupings — which are deemed to be merely acceptable — are often seeing sales processes stall, market participants said. Adding to the complexity, buyers are also grappling with AI disruption and geopolitical uncertainty, which has increased the potential for valuation mismatches.Shape shiftFor all these headwinds, the market's resources remain plentiful as private credit funds continue to raise large pools of capital and lenders remain eager to deploy it — though participants say their conviction is increasingly concentrated on a narrow group of assets.That dynamic is reshaping Europe's private capital markets. Private credit has become the financing tool of first resort for sponsor-backed transactions, panellists at SuperReturn said, with much of today's activity revolving around refinancings, repricings and amend-and-extend transactions rather than new buyouts.Volume levelPrivate credit managers say they remain busy — though increasingly in terms of volumes rather than deal count. Mattis Poetter, partner and chief investment officer at Arcmont Asset Management, said the firm had enjoyed a strong first half despite M&A volume remaining below last year's levels. While Poetter expects the firm to complete fewer deals this year, he says overall financing volumes could rise as lenders move upmarket and finance larger transactions."This year, with the BDC competition gone and the liquid markets being volatile, you will see us selectively pivoting up a little bit where it makes sense," Poetter said. "If we can finance a €150 million to €200 million EBITDA business with similar terms, pricing and structures as we would a €50 million one, that's very interesting."Meanwhile, the retreat of some of the market's most aggressive market players has also shifted negotiating power back toward direct lenders. "The most aggressive player on the market, which was the BDCs, has gone," Poetter said. "That affects pricing, terms and leverage in a positive way for us. It's much more lender-friendly than last year."Terms and Privacy PolicyEU DSA contactPrivacy & Cookie Settings