Private Debt Fund Survey 2026: Growth, Diversification and Regulatory Change (KPMG Switzerland)

Summary

• The survey covers more than 1,900 Luxembourg private debt funds and sub-funds with approximately EUR605 billion of AuM, based on data from 12 depositary banks.p.4
• Evergreen funds now represent 13 percent of surveyed funds, up from 8 percent in the 2025 survey.p.4
• 50 percent of surveyed funds target returns of 6 to 10 percent, and 21 percent target returns of 11 to 15 percent.p.4
• 89 percent of Luxembourg debt funds are closed-ended.p.7
• RAIFs make up 70 percent of regulated debt funds, up 6 percentage points compared with last year.p.8
• The SCSp is the vehicle of choice for other AIF debt vehicles, at 82 percent.p.10

Key insights

1. Direct-lending origination increased by 26 percent compared to 2024, lifting its share of the European leveraged-debt market from 15 percent to 17 percent.p.13
2. Preqin forecasts private credit AuM to reach approximately US$4.5 trillion by 2030.p.13
3. The European direct-lending default rate (by count) rose from 1.0 percent in 2024 to 1.6 percent in December 2025.p.16
4. AIFMD II sets leverage limits of 175 percent for open-ended and 300 percent for closed-ended loan-originating AIFs.p.19
5. 48 percent of surveyed debt funds qualify as loan-originating funds, while 52 percent do not.p.19
6. The UK alone accounts for 42 percent of debt fund initiators in Luxembourg, and North America 20 percent.p.25
7. Luxembourg debt funds use three main strategies: direct lending (45 percent), mezzanine (16 percent) and asset-based lending (12 percent).p.26
8. Institutional investors make up 79 percent of debt fund investors.p.28
9. The most popular valuation method is fair value (84 percent).p.30