Private Debt Fund Survey 2025
The private debt market continues to evolve from a niche strategy into a cornerstone of global asset allocation, and Luxembourg remains at the heart of this transformation. The 2025 edition of the KPMG Private Debt Fund Survey once again highlights the dynamism of the market and the commitment of its participants to innovation, resilience, and long-term vision.
This year’s findings confirm not only the strong momentum of the asset class, with double-digit AuM growth, but also its increasing sophistication. Luxembourg’s ability to offer flexible structuring options — from RAIFs and SIFs to the widely used SCSp — continues to attract managers seeking a reliable and efficient European platform. The rise of evergreen vehicles, semi-liquid strategies, and digital solutions points to a market that is becoming more agile, more investor-centric, and more global.
At the same time, the private debt ecosystem is adapting to new challenges. From regional conflicts to trade shifts, geopolitical developments continue to influence strategy, while managers navigate a higher-for-longer interest rate environment. Emerging trends such as thematic investing, hybrid structures, and retailisation are reshaping the market.
In particular digitalisation, including blockchain, tokenisation and improved data solutions, is opening the door to faster, more transparent, and more accessible private markets, and Luxembourg is well positioned to lead this change. We also observe a delicate balancing act between ESG ambitions and performance goals.
As private debt cements its place as a core allocation for institutional and, increasingly, retail investors, we remain confident that Luxembourg will continue to provide the right ecosystem, with the regulatory clarity, expertise, and innovation required to support the industry’s next phase of growth.
On behalf of ALFI, we would like to thank KPMG for their collaboration and all market participants who contributed to this year’s survey. Your insights make this publication an essential reference for the global private debt community.
Other takeways
- 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 DLT agent, approved in July 2025, highlights the country’s ongoing role in advancing blockchain and tokenization within private markets.
About this research
Objectives
This study has two main objectives:
- Interpret current behaviors and structuring trends related to private debt funds in Luxembourg and predict their trajectory.
- Provide qualitative insights based on numerical data.
Methodology
We received data from 13 active depositaries representing 1,500+ funds (or sub-funds) investing in private debt.
We sent a predefined questionnaire to each depositary surveyed to gather data on the various debt funds that they oversee. This questionnaire of 38 closed-ended questions covered a range of topics, such as fund category, regulatory regimes, legal forms, geographical investment targets, investor origin and financial statement data.
The following depositaries/depositary banks were surveyed:
- Alter Domus
- Brown Brothers Harriman Luxembourg
- BNP Paribas, Succursale de Luxembourg
- The Bank of New York Mellon
- Citco Fund Services
- Edmond De Rothschild Asset Management
- J.P. Morgan Bank
- HSBC Continental Europe
- UBS Europe
- State Street
- Banque de Luxembourg
- IQ-EQ
- Aztec Group.
Content
The survey’s key findings are disclosed in this report on a no-name basis. Research for this survey began in December 2024.