New financing pathways for European infrastructure
The report “Private Credit’s Next Act in Europe”, published by Oliver Wyman (OW), analyses market developments and the growing role of private credit in financing strategic infrastructure through asset-based finance (ABF). According to EU estimates, Europe may need to invest €3 trillion over the next five years in energy and digital infrastructure, even before accounting for defence and national security needs. Meeting this demand will require funding from across the financial system: public markets, banks, governments, and private capital. The report highlights significant opportunities for private credit to gain market share in this scenario and envisages partnerships between banks and private credit investors as a way to optimize resources.
Key takeaways:
- Globally, asset-based financing (ABF, which includes energy infrastructure, data centres, aircraft, rail and shipping) has been the main driver of private credit industry growth. According to OW’s estimates, ABF assets under management at leading firms grew 38% in the five quarters ending 3Q’25, which is roughly twice the pace of other private credit segments. US insurers have been a key force behind this expansion, while private credit fundraising in the UK and continental Europe rose 40% in 2025.
- Europe’s ABF market is large but still bank dominated. At €4.2 trillion, it is comparable in size to the US market. However, over 75% remains on banks’ balance sheets, with non-banks accounting for only around 13%, compared with 34% in the US.
- Europe cannot deliver on its AI, energy and industrial ambitions without deeper and more resilient capital markets. The challenge is not a shortage of savings, but inefficient capital transmission. European securitization markets remain underdeveloped, and life insurers allocate just 0.4% of their portfolios to securitizations, compared with 17% in the US — partly reflecting Solvency II constraints introduced in 2016. The contrast in data centre financing is particularly striking: since 2018, US data center securitization has totalled $63.6 billion ($27 billion in 2025 alone), while the EU has issued only $0.8 billion. Regulatory reforms in the UK and potential recalibration in the EU could help unlock greater demand for investment-grade ABF assets from insurers.
- Bank–private credit partnerships are emerging as the new model. Large alternative managers increasingly recognize banks as the most efficient originators of real economy credit. The most successful players will be those who are able to combine banks’ underwriting discipline, distribution strength and customer access with private capital’s appetite for long-duration, illiquid risk.
Ultimately, Europe’s ability to meet its energy and digital ambitions will depend not only on the availability of capital, but on building deeper, more integrated and more efficient capital markets.
Filter results
Partnerships between banks and private credit: The winners will be those that combine bank underwriting discipline, distribution, and customer access with private capital’s appetite for long-dated, illiquid risk, according to Oliver Wyman.
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