Jefferies Credit Partners closed fundraising for a new private credit secondaries fund at €1 billion, marking one of the larger dedicated vehicles for acquiring existing loan portfolios in the European market. The vehicle will pursue both outright loan acquisitions and new lending opportunities in situations where existing lenders need liquidity or portfolio repositioning. The close comes as private credit secondaries volume reached $38 billion in transaction value globally in 2024, up 47% year-over-year, according to Jefferies' own placement data.

The fund structure allows Jefferies to buy loan positions from family offices, regional banks, and smaller credit managers who need to exit positions before maturity, often at discounts ranging from 3% to 12% below par depending on documentation quality and borrower performance. The firm is also using the vehicle to write new credit in situations where it can acquire a controlling stake in the capital structure from a fragmented lender group, a strategy that has accounted for roughly 40% of secondaries volume in the European mid-market over the past eighteen months. Jefferies has not disclosed the fund's target return, but comparable vehicles in the space are underwriting gross IRRs between 11% and 14% with hold periods of three to five years.

The timing reflects two parallel supply drivers. First, the European private credit market now holds an estimated €620 billion in outstanding loans, a figure that has doubled since 2019, and a portion of that capital is held by lenders who lack the balance sheet or mandate flexibility to hold through a full credit cycle. Second, regulatory pressure on regional banks—particularly in Germany and France—is pushing loan portfolios off balance sheets faster than expected, creating acquisition opportunities for non-bank buyers with permanent capital. Jefferies entered the European private credit secondaries market in 2021 and has completed 22 transactions across the strategy, with an average transaction size of €85 million.

Allocators should watch for two follow-on developments in the next six to nine months. First, whether Jefferies begins syndicating portions of acquired loans to other credit funds, a secondary distribution model that has emerged in the U.S. market and would compress hold periods while maintaining origination economics. Second, how the fund navigates covenant-lite loans acquired in secondaries transactions, particularly in sectors where EBITDA adjustments were aggressive during the 2021-2022 vintage. The European secondary loan market remains fragmented, with no dominant pricing benchmark, and valuation disputes between buyers and sellers have added an average of 43 days to transaction timelines in 2024 compared to 2022.

Jefferies now manages approximately €4.2 billion in private credit strategies across direct lending, asset-based finance, and secondaries, with the new fund representing roughly 24% of that total. The firm has not announced a successor vehicle, but the fundraising environment for private credit secondaries has tightened since mid-2024, with only three funds above €500 million closing in the European market in the past twelve months.