Eurazeo closes largest direct lending fund at €3.9 billion amid tough market
Eurazeo Private Debt VII raises €5.5 billion in commitments, focusing on lower mid-market Europe, as PitchBook data reveals a record share of capital flowing to experienced managers.
French asset manager Eurazeo has closed its largest direct lending fund, Eurazeo Private Debt VII, at €3.9 billion, which equates to approximately $4.5 billion. The fund exceeded its initial target by nearly a third, attracting total commitments of €5.5 billion from a mix of institutional investors, separately managed accounts, and private wealth capital. International investors account for more than 60% of the capital, with limited partners from North America and Asia identified as the most active participants.
The closure represents a significant expansion for the firm, with the new fund being roughly 1.7 times the size of its 2023 predecessor. This growth aligns with broader trends in the region, as PitchBook data indicates that European mid-market fund closes in the first quarter of 2026 recorded an average step-up of 1.5 times in size. The fund focuses on lending to lower mid-market companies across Europe and is already 65% deployed across more than 70 companies.
This achievement stands in contrast to a challenging global private debt fundraising environment in 2025. According to PitchBook’s 2025 Annual Global Private Debt Report, 55 direct lending funds reached a final close last year, raising a combined $101.7 billion. This figure represents a year-on-year decline in both the number of funds and the capital raised, marking the third consecutive year of declining fund counts, even as total capital raised remained broadly steady at around $221 billion.
Market dynamics have increasingly favoured established players. In 2025, 93% of all private debt capital raised went to experienced managers, defined as those on their fourth fund or later, marking a record share. In Europe, private debt funds raised $79.4 billion last year; however, PitchBook notes that excluding the two largest closes by Ares Management and CVC Capital Partners, the region’s share of global fundraising returns to historical norms.
Pricing pressures remain intense as competition for deals heats up. Spreads on European direct lending deals averaged 509 basis points in the 12 months to April 2026, slightly below the full-year 2025 reading of 522 basis points. This tightening reflects a resurgent broadly syndicated loan market taking back large-cap deals, pushing larger direct lenders down the size ladder to compete for lower mid-market opportunities.
