According to the annual KPMG Private Debt fund survey commissioned by the Association of Luxembourg Fund Industry (ALFI), the country’s private debt market expanded by 51% in 2023, with assets under management rising to €404.4bn, compounding last year’s AuM growth of 45.4%.
The report also included data on the sector’s fund structure, investor base, ESG classifications and regulatory outlooks amongst other research areas.
Julien Bieber, Partner Tax, Alternative Investments & Co-Head of Private Debt at KPMG in Luxembourg said: “Despite uncertainties, the Luxembourg private debt fund market has demonstrated once again, its attractivity by expanding at a remarkable pace and the outlook for this asset class is optimistic. The Luxembourg financial hub managed to capture this phenomenal growth thanks to its cross-border fund raising and investment know-how.”
“We’re seeing private debt hit new levels of mainstream acceptance compared to the traditional bank lending, impacting how borrowers access and negotiate debt packages. The demand for debt financing remains robust, such as financing sustainable projects in many economic sectors and major infrastructure. The appeal to this asset class is steadily growing,” she added.