Is the evergreen structure interesting for private credit? (Roundtable Private Credit - part 1)

December 8, 2025

^{This report was originally written in Dutch. This is an English translation.}

Private credit is rapidly becoming a cornerstone of modern portfolios. The market is growing globally, shifting from corporate lending to broader niche segments and attracting more and more institutional investors. In part 1 of this roundtable discussion, experts examine the size of the market, the main sub-segments and the emergence of evergreen fund structures.

By Hans Amesz

This is part 1 of the report. Part 2 will be published on Wednesday 10 December and part 3 on Thursday 11 December.

How big is the market in Europe compared to the United States? And is there private credit in emerging markets?

Cyrus Korat: 'The real estate debt market, particularly commercial mortgages, is worth approximately $1.25 to $1.5 trillion. However, it is a rather opaque market and therefore suffers from a lack of reliable statistics.'

Sam Foster: 'We currently estimate $1.7 trillion in private credit AUM worldwide, of which approximately $1.1 trillion is in the US, $500 billion in Europe and $100 billion in the rest of the world. Until now, the majority of this has been corporate direct lending, but we are now starting to see a shift to other areas, such as asset-based finance, which we believe could stimulate strong growth in the coming years.'

What sub-segments are we talking about? What are the latest niche markets?

Robert Scheer: 'You can break it down however you like. In the direct corporate loan market, for example, you can have segments based on the size of the target companies, the risk tolerance of the strategy, geographical focus, sector focus, and so on. You can also look at newer forms of private credit, such as ABL.'

Foster: 'We distinguish between three areas: corporate credit, asset-based finance and commercial real estate credit. Asset-based finance is basically everything that falls outside the more traditional corporate or commercial real estate credit: from mortgages for homes to consumer loans, financing of aircraft and digital infrastructure, but also intangible assets such as subscription lines, music rights and royalties.'

Shelley Morrison: 'The global market for Fund Finance is estimated at around one and a half trillion dollars. We often describe this as the largest asset class that investors have never heard of. There is still plenty of room for institutional investors to increase their market share.'

Jorg Sallaerts: 'Certain asset classes are growing faster than others. From a private credit perspective, the vast majority are still engaged in senior direct lending, but a few additional strategies have also emerged. We have also seen more opportunistic or complex senior lending strategies appear on the market.'

Rajesh Sukdeo: 'We have seen the mortgage lending asset class grow significantly in recent years. The annual turnover in volume exceeds one hundred billion, so it is a fairly large market. Banks still play a very important role in this area, but non-bank lenders are now established players in this segment and are becoming increasingly important.'

What is the typical (fund) structure in private credit? What is your opinion on evergreen structures?

Boris Harmsen: 'Direct lending is a less liquid asset class and was previously only available through closed-end funds. In recent years, however, new structures have been developed that meet the needs of different investors and sometimes offer (limited) liquidity.'

Korat: 'Debt is very suitable for evergreen structures because of its fixed term. Real estate is a textbook example of when open-ended funds do not work. As debt managers of an evergreen fund, we do not have to actively decide what to sell in the fund to generate liquidity for certain investors. Real estate managers do have that problem.'

Morrison: 'I am a fan of evergreen structures for private credit. Some of the concerns reported about conflicts of interest in evergreens are exaggerated. Many of these alleged conflicts of interest or concerns about liquidity matching, for example, can, I believe, be easily avoided by a more creative or innovative fund structure.'

Foster: 'In general, we believe that well-structured evergreen vehicles can offer attractive, streamlined solutions for clients seeking fully funded exposure to diversified portfolios without the need for capital calls. This allows them to continue investing for the long term and grow their returns, while maintaining potential access to liquidity. However, it is crucial that managers focus on delivering results for these investors, rather than simply providing access or accumulating assets. In this regard, we see three key risks: maintaining discipline in terms of size and capacity, ensuring sound asset-liability management, and managing valuations, particularly when investors can subscribe and redeem at NAV.'

Louay Mikdashi: 'An illiquid asset cannot be converted into a liquid asset, and investors must proceed with caution. The aim is to reduce the mismatch between assets and liabilities, while providing all investors with efficient access. We expect the evergreen structure to be a key driver of growth within the asset class over the next ten years or so.'
 

We expect the evergreen structure to be a key driver of growth within the asset class over the next ten years.

 
Jos Kalb: 'Valuation is important because it determines the costs charged. If the valuation is too high, this not only affects investors who want to exit, but also the management costs. So there needs to be proper oversight of how valuations are determined.'

Are there typical partnerships, for example with banks and private equity, when structuring deals? What are the drivers for these collaborations?

Mikdashi: 'The relationship between banks and private credit managers is not a zero-sum game. Although competition in areas such as traditional commercial lending has increased, there are still significant opportunities for collaboration. For example, banks continue to offer storage facilities that support private credit transactions in various sectors. As banks increasingly adopt open architecture models, we believe that both banks and private credit capital can grow and be successful together.'

Harmsen: 'If you want to invest in private credit as an institutional investor, you need to make sure you choose a manager who can deploy capital locally and has a physical presence in the various countries. You need to look at the size of the team in relation to the amount of capital raised and in relation to the size of the investment opportunities. If those three elements are in balance, you are probably dealing with an attractive value proposition. To be a valuable partner for private equity and for the limited partner, a private credit manager should be able to do everything themselves. You need to be able to raise your own capital, source deals yourself and manage that capital throughout the term of the loan, in good times and bad. I think the market is indeed starting to mature. You see managers raising larger funds. More than 80% of the mid-market is now financed by private lenders, and no longer by banks. Incidentally, banks have been withdrawing from this market for years.'

Sallaerts: 'I think that both banks and direct lenders have a role to play when it comes to the European private credit markets, which are indeed less efficient than those in the United States. This is still evident from the attractive returns we can achieve in Europe today compared to the American market. But there is no escaping the fact that the private credit market has experienced tremendous growth over the past fifteen years, because private equity funds appreciate the flexibility, speed and capital strength of our solution.'

Scheer: 'From an investor's perspective, I would have my doubts about investing in a fund that depends on banks as its origination channel. Potential conflicts of interest lurk around every corner. Will the bank show me the best deals it generates as a bank?'

Cyril Roblin: 'Regardless of the role banks play in syndicated loans, it is crucial that sourcing is done independently. We have the ability to arrange or co-arrange financing for our transactions ourselves. We even have our own exclusive sourcing, which is an important part of our business. It is really fundamental to ensure that we are not dependent in terms of sourcing and that we can find the best opportunities.'