A look back at the Khiplace meeting: 10 years of private debt in France

Gathered at a meeting organized by Khiplace on May 12, 2026, institutional investors and private credit specialists reviewed a decade of market transformation. While private debt has established itself as a cornerstone of alternative asset allocations, participants emphasized the need for a return to greater discipline in an environment now characterized by persistently higher interest rates and increased demands for liquidity and transparency.

It's hard to imagine today that private debt was still considered a marginal asset class ten years ago. Driven by the gradual withdrawal of banks after the financial crisis, and then by the low interest rate environment of the 2010s, it has progressively become a core component of institutional portfolios.

This was the observation shared by the participants of the meeting organized by Khiplace around the theme "A look back at 10 years of private debt in France". Moderated by Agnès Lossi , partner at Indefi, the discussions brought together Antoine Gosselin-Mercury , senior director private credit at Barings, Victoire Blazsin , partner at Zencap AM, Diana Hazvartian , head of private debt funds at Caisse des Dépôts, and Sylvain Sérandour , head of private assets at Arkéa AM.

From a niche to a strategic allocation

In a decade, the market has profoundly changed in scale. Private debt is no longer just an opportunistic alternative to listed credit: it now constitutes a strategic asset for many investors seeking recurring returns and diversification.

For stakeholders, this rise in power is explained as much by the regulatory evolution of the banking sector as by the ability of direct lending to offer attractive risk-adjusted returns, with limited apparent volatility.

But this rapid growth has also transformed practices. Financing structures have become more sophisticated, with the rise of unitranches, bridge financing, sponsorless mezzanine financing, and certain NAV lending strategies. Investment vehicles have also evolved: FPS, SLP, ELTIF II, and evergreen fund formats have progressively broadened the accessibility of this asset class.

However, according to several participants, the most significant development remains the institutionalization of the market. Due diligence, governance, and risk monitoring processes have been considerably strengthened since the sector's inception.

Banks and private debt: a relationship that has become complementary

Discussions also focused on the role of banks in this ecosystem. While banking institutions have lost ground on certain LBO transactions, particularly unitranche financing, they remain central to financing the lower end of the balance sheet and the mid-market.

The participants described a relationship of complementarity rather than direct competition. Banks remain key players in the origination and distribution of credit, while private debt funds provide flexibility, speed of execution, and structuring capabilities.

However, some participants warned against a development where private debt would become primarily a tool for bank de-risking, absorbing risks that banks no longer wish to carry directly onto their balance sheets.

A Europe more resilient than the United States

The geographical development of the market was another key focus of the discussions. Historically very centered on France, the European private debt market has gradually diversified, particularly towards Germany and the Nordic countries.

These markets offer different risk-return profiles, often considered more disciplined and conservative. Several participants pointed out that Nordic markets, for example, generally offer better protection for lenders and a historically more cautious financial culture.

Europe now appears to be a more balanced market than the United States, where strong growth in outstanding amounts has sometimes led to a relaxation of covenants, higher levels of leverage and significant sectoral concentration, particularly in technology.

A resilience tested by crises

Covid, war in Ukraine, inflation, sharp rise in rates, geopolitical tensions: private debt has gone through a succession of major shocks in just a few years.

For the participants, the portfolios generally demonstrated a certain resilience. This strength is explained in particular by the structuring of the financing, the close relationships with the borrowers, and the lenders' ability to intervene quickly in case of difficulty.

However, participants also emphasized the limitations of traditional risk indicators. Default rates remain relatively low, but they do not always reflect the true extent of pressure on portfolios. Restructuring, maturity extensions, PIK mechanisms, and watchlist placements complicate the assessment of actual risk.

In this context, institutional investors now expect managers to provide a much higher level of transparency, granularity and operational monitoring of their portfolios.

AI and ESG: the new risk criteria

Artificial intelligence and ESG naturally featured prominently in the discussions. Participants acknowledged that these topics were no longer simply marketing reports but were gradually becoming integrated dimensions of risk analysis models.

AI raises significant questions, particularly in software and services. Investors are now seeking to assess the ability of funded companies to withstand technological disruptions and adapt their business models.

Expectations regarding ESG are also evolving. Investors are demanding more operational indicators, more closely linked to real financial risks than to a purely declarative approach.

These new criteria are gradually changing the due diligence processes for entry, but also the monitoring of portfolios over time.

The debate surrounding evergreen funds

The rise of evergreen and semi-liquid structures has sparked lively debate. While these formats broaden access to private debt for a wider range of high-net-worth clients, several participants pointed to recent tensions observed in some US funds facing significant redemption requests.

The issue of the adequacy between the liquidity promised to investors and that of the underlying assets remains central. Several participants emphasized their preference for traditional closed-end funds, considered more consistent with the illiquid nature of the financed assets.

However, evergreen structures could retain a relevant role in certain dedicated mandates or in more diversified portfolio constructions.

Back to selectivity

Beyond reviewing the past ten years, participants focused primarily on the challenges ahead. In an environment of persistently higher interest rates, private debt will no longer be able to rely solely on abundant liquidity.

Value creation will increasingly depend on the quality of origination, credit discipline, diversification, and the ability to select the right market segments.

Several avenues have been discussed for the coming years: sponsorless mezzanine, CLO, NAV lending or structuring portfolios combining an evergreen “beta” base and more opportunistic satellite strategies generating alpha.

The message delivered to the fund managers present ultimately converged on a single watchword: return to the fundamentals. In an asset class that has now matured, investors expect fewer promises of returns and more rigor, transparency, and alignment of interests.