ALFI/KPMG Private Debt Fund Survey 2025

Private debt in Luxembourg expands by nearly 25%, KPMG/ALFI survey reveals.

• The Private Debt Fund Survey 2025 once again reveals a dynamic market driven by participants committed to innovation, resilience, and long-term vision.
• 64% of funds are structured as Reserved Alternative Investment Funds (RAIFs), up 2 percentage points (pp) compared to 31 December 2023.
• Special Limited Partnerships (SCSp) remain the preferred choice for AIF debt vehicles, representing 80% of the market.

Luxembourg continues to solidify its position as a leading European fund hub for alternative credit strategies, according to the Private Debt Fund Survey 2025, conducted by KPMG in collaboration with the Association of the Luxembourg Fund Industry (ALFI). The survey’s findings build on last year’s momentum, with assets under management (AuM) increasing by 24.7% between December 2023 and December 2024.

Julien Bieber, Partner Tax, Alternative Investments, at KPMG in Luxembourg, said: “Investor demand and product innovation are driving clear growth in private debt. Luxembourg’s rise in cross-border fundraising vehicles is turning the country into a go‑to location for origination and servicing. With ESG checks built into our processes and modern technology streamlining transactions, we are strengthening the market’s resilience and broadening access for all participants.”

Serge Weyland, CEO at ALFI, highlighted: “Driven by investor confidence and adaptability, Luxembourg’s private debt market continues to grow and is steadily evolving. Its regulatory flexibility, innovative environment, and skilled workforce cement its role at the core of Europe’s alternative investment landscape.”

Key findings of the survey include:

• Strong growth in AuM: the Luxembourg private debt market grew by 24.7% in AuM based on data provided by 13 Luxembourg depositary banks.
• European investment focus: while North America remains a key investment region (17%), Europe continues to dominate with European Union (EU) member states accounting for 37% and the rest of Europe for 26%. Other regions include Other Americas (6%), Asia (5%), and Africa (3%).
• Diversified sector exposure: investment is broadly spread, with leading allocations to chemicals, IT, telecoms, media and communications (19%), healthcare and life science (17%), energy and environment (16%), infrastructure and transportation (15%), and consumer goods (13%).
• Fund structure trends: the balance between debt-originating funds (50%) and debt-participating funds (48%) has shifted only marginally compared to last year (49.3% and 49.5%, respectively). The share of open-ended funds has declined from 26% to 10%, while closed-ended funds account for 90% of the market.
• Vehicle preferences: RAIFs dominate Luxembourg’s debt fund market (64%), followed by SIFs (29%), Part II funds (5%) and SICARs (2%). Debt fund managers choose the SCSp as preferred legal form (80%).
• Strategy: Luxembourg debt funds use three main debt strategies: direct lending (52%), mezzanine (17%), and distressed debt (11%).
• Investor base: institutional investors continue to lead the market (82%), followed by retail investors (7%), high-net-worth individuals (4%) and private banks (4%). Investors are primarily from the EU (77%, up from 68% last year).
• Environmental, social, and governance (ESG) integration: ESG considerations remain relevant, though managers report a more pragmatic approach in today’s higher-rate environment. 71% of funds are classified under SFDR Article 6, a decrease of 5pp compared to last year. At the same time, there has been a modest shift toward Article 8 (25%, up 4pp) and Article 9 (4%, up 0.5pp) classifications.
• Regulatory developments: The implementation of AIFMD II and ELTIF 2 is expected to broaden cross-border loan origination and retail access.
• Digital innovation: Luxembourg’s first Distributed Ledger Technology (DLT) agent, approved in July 2025, highlights the country’s ongoing role in advancing blockchain and tokenization within private markets.

Download the KPMG/ALFI Private Debt Fund Survey 2025.

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Notes to editors:

For more information and interview requests, please contact:

• ALFI, Luigi Salerno, Head of Communications: Salerno@alfi.lu
• Peregrine Communications: ALFI@peregrinecommunications.com

Methodology of the survey:

The 2025 survey conducted jointly by ALFI and KPMG (9th edition), draws on data from 13 depositary banks based in Luxembourg with significant exposure to the private debt fund market, and covers more than 1,500 private debt funds and sub-funds.

Since 2017, the survey has included figures for private debt funds domiciled in Luxembourg that have a depositary bank in Luxembourg, regardless of where their alternative investment fund manager (AIFM) is located.

The purpose of the survey is to analyse the dynamics and trends of private debt funds in Luxembourg, anticipate future developments and provide data-driven qualitative insights.

About ALFI

The Association of the Luxembourg Fund Industry (ALFI) represents the face and voice of the Luxembourg asset management and investment fund community. The Association is committed to the development of the Luxembourg fund industry by striving to create new business opportunities, and through the exchange of information and knowledge.

Created in 1988, the Association today represents over 1,400 Luxembourg domiciled investment funds, asset management companies and a wide range of businesses that serve the sector. Luxembourg is the largest fund domicile in Europe and a worldwide leader in cross-border distribution of funds.

ALFI’s mission is to lead industry efforts to provide solutions and make Luxembourg the most innovative international investment fund centre.

To keep up with all the news from ALFI and the fund industry in Luxembourg, follow us on LinkedIn, YouTube and Flickr.

For more information please visit www.alfi.lu.

About KPMG

As a member of KPMG International, a network of independent firms operating in 142 countries, KPMG in Luxembourg provides a full range of audit, tax and advisory services to major national and international clients active in the financial, insurance, commercial and industrial sectors.

With more than 2,000 people, KPMG in Luxembourg is one of the country’s leading audit, tax and advisory firms. Our approach to relationships and service delivery is designed to help clients exploit new opportunities, improve performance and manage risk.

We also participate in/or chair various industry groups in Luxembourg, including the “Haut Comité de la Place financière”, the Commission de Surveillance du Secteur Financier (CSSF), the Bankers’ Association (ABBL), the Association of the Luxembourg Fund Industry (Alfi) or the Luxembourg Institute of Directors (ILA).