Europe remains one of the largest distressed debt markets globally, attracting a broad range of institutional investors including private credit funds, hedge funds and specialised distressed asset managers.
Despite relatively low aggregate NPL ratios in the European banking system, the region continues to generate deal flow due to sector-specific stress, regulatory developments and ongoing balance sheet optimisation by banks.
The combination of a mature servicing infrastructure and a well-developed secondary market continues to support investor participation.
Market implication
Europe is expected to remain an important market for distressed credit investors seeking long-term opportunities in loan portfolios and credit assets.