Private Debt Explosion: Breaking New Ground

March 04, 2025

Spotlight Editorial Team

We are delighted to bring you this edition of the Spotlight Magazine. With all the recent changes in the US, we are expecting an interesting year ahead of us!

In the last 12 months, we have seen private debt markets take off over other strategies. In particular, there are now more creative ways of bringing in new types of investors to this asset class, including insurers, pension plans and of course “retail”, which has different meanings in different jurisdictions. We are also seeing creative solutions to raise capital for private debt with the launch of US-rated feeders, EU insurance wrapped feeders and private wealth platforms. This heady combination of legal innovation and a changing US regulatory landscape may make this year an even better fund-raising year for private debt.

Our first article takes us through what retail really means in private credit and the various bear traps to be aware of. From there we move on to a refreshed discussion on the ongoing debate of whether using an ELTIF or a regulated Luxembourg fund — called a Part II Fund — is optimal for a “retail” fund raise. We then discuss the recent changes in France allowing managers to be creative in how they raise funds in the country. The recent convergence of US and EU ESG changes, that we discussed in our last edition, is refreshed in an article that focuses on what managers need to be aware of, taking into account the rising anti-ESG sentiment from the US. This leads us neatly into an article that throws some light on the ever-evolving US regulatory landscape for private funds, with the likely changes at the SEC making waves in the global markets.

We round off with a useful tour of US direct lending solutions for non-US investors from a tax perspective and conclude this edition with an interesting opinion piece on the growing impact of artificial intelligence on the legal market.

We do hope you enjoy this edition and please feel free to reach out to any of our contributing authors on the topics covered.