Private debt remains a structural asset class, but more than ever it requires a clear understanding of strategies, vehicles and liquidity mechanisms.
Misconception #1: "Private debt has become riskier"
The current slowdown does not mean that asset quality has deteriorated. In Europe, direct lending deal volume is down 37% year-on-year, mainly due to a less dynamic M&A market. Even so, acquisition financing still accounts for 64% of deal volume completed since the start of the year, illustrating that private lenders continue to finance the real economy (PitchBook | LCD, European Private Credit Monitor, February 2026).
At the same time, institutional investors continue to increase their allocations. Global private debt assets under management now stand at $2,364 billion, up from roughly $500 billion in 2014, confirming that this asset class continues its structural growth (PitchBook, Global Private Debt Report H1 2025).
The issue at stake is not whether private debt is being called into question, but the ability to select the best managers and the best deals.
Misconception #2: "The problem is a lack of market liquidity"
By nature, private debt finances companies over horizons spanning several years. Illiquidity is therefore not an anomaly; it is the normal counterpart of investments made in long-dated assets.
Far from lacking resources, the market still holds $542.7 billion in dry powder — capital already raised and available to finance new deals (PitchBook, Global Private Debt Report H1 2025).
The real question is not the liquidity of the market, but the alignment between the liquidity a fund offers and the nature of the assets it holds.
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Misconception #3: "All private debt funds offer the same liquidity profile"
This is probably the most misleading claim of all. Closed-end funds are designed to be held until the maturity of their investments. Evergreen vehicles, by contrast, organize periodic liquidity through precise mechanisms: redemption windows, redemption caps, gates…
This distinction matters all the more given the strong growth of vehicles aimed at private investors. In the first half of 2025, evergreen funds raised $86.4 billion, a year-on-year increase of more than 50%, of which 55% was directed toward private debt strategies (PitchBook, Global Private Debt Report H1 2025).
The real issue, then, is not the underlying asset but the structure of the investment vehicle and the liquidity rules it sets out.
Private Debt: Moving Beyond the Shortcuts
Current debates do not call into question the fundamentals of private debt. Above all, they are a reminder that it is essential to look beyond investment strategy to understand how funds are structured, how their liquidity mechanisms work, and how they operate.
Risk is no longer confined to credit risk alone. It also lies in understanding the structure of investment vehicles, their performance drivers, and their fit with investors' investment horizons.
Key Takeaways
Private debt remains sought after by institutional investors. Illiquidity is a normal feature of long-dated assets. The liquidity profile depends as much on the vehicle's structure as on the assets it holds. CLOs remain a technical strategy that warrants a specific educational effort.
Disclaimer
The information presented in this article is provided for information and educational purposes only. It does not constitute investment advice, a personalized recommendation, or a solicitation to subscribe to any financial instrument.
Investments in private markets carry, in particular, a risk of capital loss, a liquidity risk, and risks specific to the underlying strategies. Past performance is not indicative of future performance.
Before making any investment decision, each investor should review the fund's regulatory documentation, including the Key Information Document (KID) and the fund rules, available from Private Corner, and ensure that the investment is suited to their financial situation, objectives and investment horizon.
