1. Private credit plays a growing role in European finance
Private credit has expanded at double-digit rates over the past decade, assuming an important role as a provider of finance to the global economy. In the process, it has become a mainstream asset class and a major driver of growth for the investment industry.
Private credit – an umbrella term for non-traded, non-bank lending to businesses underserved by banks or public debt markets – has no universal definition and is opaque by nature. As a result, estimates of global assets under management (AuM) vary from US$1.5-2.0 trillion1 to US$3.5 trillion2. Direct lending is the largest element, followed by lending to business development companies (BDCs), for commercial real estate, and via collateralised loan obligations (CLOs).
Private credit is well established in the US and expanding fast in Europe and elsewhere. Estimates of annual growth range from 15-30%, driven by: Banks’ increasingly selective approach to capital deployment; investor appetite for floating rate debt with an illiquidity premium; growing confidence in private credit’s flexibility and execution certainty; and expansion into new areas like consumer finance. According to Preqin, global private credit AuM could double between 2024 and 20303.
Growing systemic importance, increasing dominance by a handful of asset managers, and the expansion of semi-liquid funds with periodic redemption windows are drawing regulatory attention. The SEC, FSB, and Bank of England are among those focusing on areas like subscription credit line leverage, links with the banking system, mark-to-model valuations, liquidity, and the potential for pro-cyclicality.
Potential sources of risk include shifting expectations for inflation, rates and asset quality; geopolitical uncertainty and tariffs; and borrower stress in sectors like healthcare, software and consumer goods. These factors have contributed to increases in some measures of reported credit default rates. One study shows outright loan defaults remaining low at approximately 1% but rising to around 5% when certain restructuring transactions are included4.
However, while the complexity of private credit inevitably conceals pockets of risk, the sector’s strong underlying drivers mean that private credit’s importance as a source of finance looks set to continue growing for the foreseeable future.
2. Asset managers are pushing for greater private credit scale and capability
The growing size and sophistication of private credit, and of the industry’s largest asset managers and general partners (GPs), are driving the renewal and expansion of industry frameworks. Notable industry themes include:
- A growing role in financing Europe’s economy, reflected in policy and regulation by AIFMD II’s introduction of a harmonised framework for loan-originating funds. The EU’s Alternative Investment Fund (AIF) market provides over €250 billion in private credit to EU businesses5, and European private credit fundraising grew to €39.5 billion in the first half of 2025, nearly tripling year-on-year and capturing 37% of global private credit inflows6.
- An evolving investor base, including wealth channels and retail investors – with the latter’s share of private credit AuM climbing from virtually zero to 13% over the last decade7. There is also growing participation from insurers, attracted by the scope for private credit yields to offset inflation and contractual liabilities.
- The tendency for large asset managers to capture the bulk of inflows by leveraging brand, track record, scale and distribution reach – increasing market concentration. The top 20% of managers accounted for around 85% of capital deployed in 20248.
- The institutionalisation of operating models, with firms seeking to build asset pipelines, expand distribution outlets, and make systemic use of AI and other technology.
Individual asset managers are working to improve the efficiency and scalability of private credit platforms and vehicles. Firms are using M&A and strategic partnerships not only to grow assets, but to build capabilities, develop new skills, enter new markets, and access fresh distribution channels. Traditional asset managers using acquisitions to scale up their private credit offerings include Franklin Templeton (acquired Apera in 20259) and BlackRock (acquired HPS in 202410), while Apollo partnered with State Street to tap into the retail distribution potential of ETFs11.
External service providers are stepping up their own ability to provide asset managers with strategic outsourcing. In addition to custody and settlement, third party providers are upgrading their support for middle and front office activities in private credit – such as fund administration, valuation, investor reporting and liquidity management.
3. Ireland is a leading location for establishing and scaling private credit platforms
Asset managers seeking private credit expansion need host jurisdictions that allow them to scale their capital markets, distribution, and operating activities. Irish funds are distributed to over 90 countries12, and Ireland was an established hub for the structuring of credit long before the current boom.
Today, Irish leadership in CLO issuance, fund servicing and securitisation structures has created a sophisticated credit ecosystem. Ireland’s SPV (special purpose vehicle) sector comprised over 4,400 vehicles with estimated assets of €1.14 trillion at end-20241313. AIFMD II, which harmonises Europe’s framework for loan-originating funds, further strengthens Ireland’s appeal as a location for building and scaling private credit platforms.
Beyond its financial infrastructure, Ireland offers many of the characteristics sought by global credit managers: an English-speaking common law environment, a proven record of attracting international investment, deep expertise across asset management, capital markets and technology, and the talent and operational capabilities required by large-scale credit businesses. Ireland’s global connectivity is illustrated by the fact that of its 1,007 fund promoters, 297 are North American and 357 are from the UK14.
Ireland offers a comprehensive range of credit-ready vehicles, partnerships and corporate structures that can be recognised as, or integrated into, regulated Qualifying Investor Alternative Investment Funds (QIAIFs). These include:
- ICAVs: The Irish Collective Asset Management Vehicle (ICAV) is the choice of many regulated private credit funds. ICAVs can be structured as open or closed funds, standalone or within a family of funds. They benefit from dedicated fund law, eligibility for EU passporting, and the ability to make a “check-the-box” election for US tax purposes, which has particular appeal for certain cross-border credit strategies. At end-February 2026, there were 590 ICAVs with a total of 1,904 sub-funds15.
- ILPs: The Investment Limited Partnership (ILP) is intended to complement the ICAV and is particularly suited to private credit, private equity or infrastructure. ILPs can be regulated as a QIAIF or a Retail Investor Alternative Investment Fund (RIAIF) and are eligible for EU passporting. Although typically closed, they may be open ended. Since 2020, ILPs can serve as a single GP-managed umbrella with segregated sub-funds.
- ELTIFs: The European Long Term Investment Fund (ELTIF) was revised in 2024 to accept more long-term assets including infrastructure. Authorised by the CBI, ELTIFs can be marketed to institutional and retail clients across the EU without further authorisation.
In addition, Ireland allows private credit investors to deploy capital through a range of SPVs and Holdco structures. In particular, Section 110 (s.110) companies play a huge but underappreciated role in Ireland’s globally significant positions in ABS, RMBS, and asset finance. Between 2022 and 2024, Ireland saw 26% growth in securitisation SPVs and 17% growth in fund-linked SPVs1616. Key features of s.110 companies include:
- A flexible corporate structure that’s cheap, easy to run, and provides bankruptcy insulation.
- A profit neutrality mechanism designed to minimise tax leakage, usually with no withholding tax on distributions to non-resident investors.
- Generally outside the scope of financial regulation, but easily integrated into ICAV or ILP structures.
The deployment of s.110 companies has been central to Ireland’s emergence as Europe’s largest CLO hub, including a growing element of mid-market lending. Irish s.110 companies hold loans and issue notes into the capital markets, often working with investors and loans from other jurisdictions. Ireland’s financing and securitisation ecosystem, including the use of s.110 companies, also underpins its status as the world’s largest aircraft leasing centre. Over 60% of the global commercial fleet is managed in Ireland, with the top five aircraft lessors all headquartered there.
4. Ireland offers a full credit ecosystem – strengthened by 2026’s rule changes
Ireland provides credit managers with the ability to establish scalable platforms that support their wider businesses. It is much more than a fund domicile. Ireland’s regulatory maturity, institutional knowledge and capital markets expertise, added to a large and highly skilled workforce with the deep financial and technological expertise required to support institutional-scale private credit platforms, make it a credit centre of excellence. The local market boasts deep skills in custody, administration, valuation, investor reporting, legal services and auditing.
A wide choice of vehicles, an established SPV ecosystem, extensive knowledge of private credit, and full access to EU-wide distribution all make Ireland an ideal location for overseas asset managers to build scalable private credit platforms. US-based managers particularly appreciate:
- A track record of attracting and supporting global businesses – Ireland is the European hub for US tech and pharma leaders like Apple, Microsoft, Pfizer and Merck.
- A competitive innovation ecosystem, including a longstanding R&D tax credit regime that supports investment in technology, data analytics, AI, automation and other capabilities increasingly embedded into private credit operating models.
- A well-established US-Ireland tax treaty framework that’s familiar to many US multinationals.
- Third-party management companies able to provide asset managers entering the EU market with authorised, fully operational fund management infrastructure.
- A sophisticated fund administration sector serving Irish, Luxembourg and other overseas funds across multiple asset classes.
- The familiarity of common law, a significant advantage when drafting complex, technical loan agreements and financing arrangements.
- A common language for communicating technical complexities, collaborating across borders, engaging with investors, and building relationships.
These features have been enhanced by the commitment of successive Irish governments to the country’s fund industry. In 2026, this is strengthened by Ireland’s direct transposition of AIMFD II. AIFMD II creates the first EU-wide framework governing loan origination by alternative investment funds, providing greater certainty for managers operating private credit strategies across multiple jurisdictions.
To ensure consistency with other jurisdictions, Ireland transposed AIFMD II with no domestic overlays. In addition, the CBI has simplified its AIF Rulebook by:
- Ending the prescriptive loan originating (L-QIAIF) regime, enabling any QIAIF to originate loans subject to compliance with a harmonised AIFMD II regime.
- Removing previous restrictions on lending and third-party guarantees by QIAIFs, increasing structural flexibility for private credit platforms.
- Replacing the L-QIAIF distinction with mandatory liquidity management, enhanced reporting, and robust delegation oversight by asset managers.
- Simplifying requirements relating to subsidiaries and intermediary investment vehicles, such as s.110 companies, while increasing flexibility for private asset and credit structures.
- Preserving the flexibility of Ireland’s s.110 SPV regime while ensuring that loan origination through fund structures operates within a harmonised European regulatory framework.
For asset managers, these changes place Ireland on a level playing field with other EU jurisdictions, but with a significant head start as a private credit hub and in cross-border links with US, UK and global asset managers. That, in turn, will provide a foundation for further private credit innovations such as Rated Note Feeders, Collateralised Fund Obligations, and CLO ETFs – helping managers to attract capital from a wider range of sources.
5. Conclusion
Ireland’s sophisticated credit ecosystem has strong appeal to global private credit managers, and especially those in the US and UK seeking cross-EU distribution.
In part, this reflects the wide range of private credit-ready vehicles, partnerships and Holdco structures that are eligible for EU passporting. In addition to direct lending via ICAV and ILP fund vehicles, promoters can make use of SPVs for tax neutral execution.
Ireland also benefits from its wider financial infrastructure – regulatory maturity, a large and highly skilled financial and technological workforce, and deep expertise in asset management, capital markets, and support services. In addition, Ireland offers an English-speaking, common-law environment with beneficial tax treaties and a proven track record of inward investment.
Finally, Ireland’s direct transposition of AIFMD II puts it in pole position to benefit from a level EU playing field for loan origination by institutional capital from around the world.
The global private credit industry is poised to scale up its financing of European companies. Ireland emerges from 2026 as the EU’s leading host of end-to-end private credit platforms: Allowing funds to launch and scale faster, and creating a structural growth opportunity.
- Financial Stability Board, May 2026 (2024 data) ↩︎
- AIMA/ACC, December 2025 (2024 data)
↩︎ - Preqin Private Markets Preview, October 2025
↩︎ - FSB Report on Vulnerabilities in Private Credit, May 2026
↩︎ - Directive (EU) 2024/927
↩︎ - European Credit Fundraising Skyrockets, With Intelligence, September 2025
↩︎ - Retail investors in private credit, BIS, July 2025
↩︎ - Financing the Economy 2025, AIMA/ACC, 2025
↩︎ - Franklin Templeton Completes Acquisition of Apera Asset Management
↩︎ - BlackRock Completes Acquisition of HPS Investment Partners
↩︎ - State Street Announces New ETF, Furthering Convergence of Public and Private Credit Markets
↩︎ - Why Ireland, Irish Funds, March 2026
↩︎ - Activities of Irish SPVs, IDSA, June 2025
↩︎ - Why Ireland, Irish Funds, March 2026 ↩︎
- Monthly fund data, Central Bank of Ireland, February 2026 ↩︎
- Activities of Irish SPVs, IDSA, June 2025
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