Private debt: A Strategic Lever for the European Mid Market

Peter Arnold, Head of LBP AM - European Private Markets, explores how private debt is emerging as a strategic lever for Europe’s mid-market companies.
In this video, discover how flexible and responsible financing solutions are helping businesses grow, transform, and remain independent in a shifting economic landscape.

Across Europe, there are around 35,000 companies generating between €5 and €100 million in EBITDA. But these aren’t just numbers — they represent the productive foundation of our economy. Industrials, healthcare innovators, renewable energy players, logistics experts… These mid-market businesses are essential to Europe’s strength and resilience.

​​​​​​​Within this ecosystem, capital structures vary widely. About 20% are non-sponsored — often family- or entrepreneur-owned. Others are minority-sponsored, where families bring in growth capital but keep control. And then there are majority-sponsored firms, typically backed by private equity through traditional buyouts.

But things are changing. Many of these businesses are still run by first- or second-generation owners. And they’re facing a tough decision: sell control to private equity, or find another way to grow while staying independent.

This is where private debt can play a strategic role. It offers flexible, long-term, and responsible financing while strengthening the competitiveness of the European mid-market. 

For non-sponsored firms: Debt allows continuity of family ownership while providing liquidity for succession and growth. For minority-sponsored firms: Complements equity with growth financing that preserves local ownership. And for majority-sponsored firms: Remains a core element of PE buyout capital structures.

By supporting these transitions, private debt helps avoid fire sales to foreign buyers. It enables domestic growth in strategic sectors — like renewables, healthcare, digital… — and reduces dependence on banks lending or external capital.
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Private debt isn’t just a financial tool. It’s a catalyst for transformation. It supports succession, sustaining family ownership, and enabling private equity growth. At the heart of Europe’s mid-market evolution, private debt is helping shape the future of our economy.