Banks are only able to take on a fraction of Europe’s growing demand for loans, leaving the way open for alternative investors to fill the credit gap. In this compelling landscape, credit funds will have a key role to play, according to a report published by Citi.
Over the next five to ten years, more than US$1 trillion worth of loans will need to be financed to keep the European economy growing. The International Monetary Fund estimates that European banks need to reduce their asset base by $2.6 trillion, with 25% from lower lending and 75% from asset sales or profit retention.
Like any new market development, there is inherent risk and opportunity. There are also outside factors to consider such as new regulation and operational complexity.
Citi’s report features guest commentary from CVC Credit Partners, Intermediate Capital Group (ICG), M&G Investments, Park Square Capital, Primerica and Tyndaris.
Click here to download the report.