The Rise of Private Debt in Global Markets: Trends, Yields, and Institutional Demand
- Lorenzo De Sario
- 5 days ago
- 4 min read
Private debt has evolved from a niche alternative asset class into one of the most dynamic engines of global financing. As traditional banks continue to reduce exposure due to regulatory pressure and capital ratios, private credit investors—private debt funds, investment banks, and institutional capital providers—are expanding their footprint across corporate, real estate, and infrastructure sectors. What was once a complementary source of capital is now a central pillar supporting mid-market companies, industrial development, and cross-border expansion.
CGPH Banque d’Affaires, as a boutique investment advisory firm active in cross-border investment and institutional capital, plays a growing role in the structuring, arranging, and co-financing of private debt transactions across Europe, the United States, and Asia.
What Private Debt Represents Today
Private debt refers to lending solutions provided outside the traditional banking system. Instruments vary widely and include direct lending, unitranche financing, mezzanine debt, real estate private debt, infrastructure financing, distressed debt private equity strategies, and private placement debt offerings.
Borrowers use private debt for acquisitions, refinancing, growth capital, real estate development, and project finance. Investors appreciate its combination of yield, structural protections, and low correlation with public markets.
The asset class has become a core allocation for pension funds, insurance groups, sovereign wealth funds, and family offices seeking stable income, floating-rate exposure, and enhanced downside protection.
A Market in Full Expansion
Global private debt assets under management have surpassed $1.7 trillion and continue to accelerate. High interest rates have reshaped capital flows, positioning private debt as a strategic substitute for syndicated loans and traditional bank credit.
Three structural drivers support its expansion:
Higher risk-adjusted returns Private debt yields typically exceed those of traditional credit markets, often by 200–400 basis points, depending on leverage, collateral, and jurisdiction.
Customizable structures and investor protections Unlike public credit, private debt enables bespoke structuring, including collateral packages, covenants, staggered amortization, and cash-sweep mechanisms that strengthen risk controls.
Corporate demand for flexible, cross-border financing Industrial, energy, technology, and real estate operators increasingly require internationalized capital solutions as they expand across multiple geographies.
The Institutional Shift Toward Private Debt
Institutional capital providers continue to increase allocations to private debt investing. The asset class offers predictable cash flows, inflation protection through floating rates, and resilience during public market volatility.
Major categories attracting institutional demand include:
corporate direct lending
real estate private debt
infrastructure financing
distressed debt and special situations
private equity debt financing used in leveraged transactions
This broad spectrum strengthens the depth of the market and supports the rise of specialized private debt funds, platforms, and management teams operating globally.
Yield Dynamics and Risk Considerations
In 2025, yields in private debt remain elevated by historical standards. Direct lending spreads remain attractive, while unitranche and mezzanine debt offer enhanced return profiles for investors willing to accept subordinated risk.
Risk dynamics revolve around three pillars: macroeconomic environment, borrower fundamentals, and transaction structure. For institutional investors, strong underwriting standards—cash flow modelling, covenant analysis, and collateral valuation—are essential to maintaining performance.
CGPH Banque d’Affaires focuses on asset-backed, operationally resilient, and jurisdictionally robust transactions that maintain stability across varying market cycles.
Cross-Border Private Debt: A Strategic Growth Engine
Cross-border private debt is becoming a preferred financing mechanism for companies expanding internationally. It enables borrowers to diversify lenders, reduce concentration risk, and access institutional capital beyond their domestic banking systems.
Key regions driving demand include:
United States The U.S. remains the world’s most sophisticated private debt market, supported by deep institutional capital pools and advanced direct lending platforms.
Europe European mid-market companies continue to adopt private debt solutions for acquisitions, expansion financing, and corporate restructuring.
Asia Growing industrial development and real asset investments are attracting Western institutional investors seeking yield and diversification.
CGPH’s presence across Europe, the United States, and Hong Kong positions the firm as a bridge between borrowers and global capital providers.
Real Estate Private Debt: Defensive Yield with Collateral Strength
Real estate private debt has become a strategic allocation for investors seeking secured, risk-adjusted yield. Capital is increasingly directed toward logistics, industrial assets, hospitality recovery projects, and selective development financing.
Private real estate debt funds combine attractive yields with strong collateralization, making the segment appealing during periods of market adjustment or valuation repricing.
Intelligent Underwriting: The Foundation of Private Debt Management
Sophisticated private debt modelling is essential to assessing borrower resilience, cash flow capacity, asset value stability, and stress performance.
A robust underwriting framework typically includes:
EBITDA and leverage analysis
forward-looking cash flow projections
jurisdictional and regulatory risk scoring
covenant stress testing
collateral valuation and liquidation scenarios
CGPH Banque d’Affaires integrates institutional-grade modelling to ensure disciplined risk selection and execution across multiple jurisdictions.
CGPH Banque d’Affaires: Structuring, Arranging, and Co-Financing
CGPH operates with a dual capability: acting both as advisor and as co-financier alongside institutional partners. This model enhances flexibility and strengthens the alignment between capital providers and corporate borrowers.
The firm structures private debt solutions for industrial groups, real estate developers, asset owners, family offices, and international companies engaged in cross-border expansion.
Capabilities include private placement debt, club-deal syndication, asset-backed financing, real estate private debt, and institutional capital sourcing.
Case Examples (Anonymous)
Industrial Expansion – Europe to Asia CGPH structured a €10 million private debt facility for an industrial project in Southeast Asia, delivering long-term financing supported by strong collateral and multi-jurisdictional coordination.
Real Estate Logistics – United States The firm arranged a private placement debt transaction for a large logistics asset in the U.S. Midwest, integrating institutional capital and family office co-investors.
Frequently Asked Questions
What is private debt? Private debt is non-bank lending provided by private investors, funds, and institutional capital.
Why do companies use private debt? For acquisitions, expansion, refinancing, and real estate or infrastructure development that require flexible, customized capital.
What is a private debt fund? A fund that pools investor capital to provide lending solutions such as direct lending, mezzanine financing, or real estate private debt.
Is private debt attractive for institutional investors? Yes. It offers stable income, higher yields, and floating-rate protection.
What is private placement debt?
A privately issued debt instrument tailored to institutional investors, offering faster execution and customized terms compared to public markets.
