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European private credit returns outperform broadly syndicated loan market over last five years

Private credit returns in Europe have outperformed the broadly syndicated loan market over the past five years with the Lincoln European Senior Debt Index (ESDI) recording a median return of 8.1% and the Lincoln European Leveraged Loan Index (ELLI) 4.9%.

Lincoln International’s indices are based on its proprietary data from valuing over 5,000 private companies quarterly, most of which are owned by private equity and levered via the private lending market. Lincoln’s indices are independently peer reviewed by the Faculty of Finance at the University of Chicago Booth School of Business.

The ESDI is constructed from hundreds of valuations for a wide cross section of private credit managers, in direct comparison to European publicly traded debt indices.

As of the end of the fourth quarter, average European five-year yields (9.2% Lincoln ESDI versus 5.9% ELLI) and fair values (97.5% Lincoln ESDI versus 95.3% ELLI) in private credit within the Lincoln ESDI Index have remained significantly higher and with a lower standard deviation of returns than equivalent public indices.

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