Good morning, {{first_name}}! Today, we’re diving into private credit’s uncertain outlook as 44% of market participants expect a retreat in PE financing, the growing risks behind the $2.56 trillion private credit market, and Apollo’s $7.6 billion easyJet buyout. Plus, major transactions from KPS, KKR, and Mubadala Capital highlight another active week in private markets.

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MICROSURVEY

Private credit's rapid expansion into private equity financing may be approaching a turning point. Our latest PE150 proprietary survey of 64 market participants reveals that 44% expect private credit's role in PE-backed transactions to decline over the next 12–24 months, compared with 41% anticipating further growth.

However, expectations vary significantly across market participants. 49% of bankers anticipate a decline, while 50% of corporate development professionals expect moderate contraction. This cautious outlook contrasts sharply with consultants, 84% of whom foresee expansion.

Perhaps most notably, 60% of PE sponsors expect private credit's role to increase, including 40% anticipating significant growth. This divergence suggests that sponsors continue to value private credit's execution certainty, customized structures, and financing flexibility, even as competition from traditional lenders intensifies.

The takeaway: Private credit's next phase may be defined less by broad market expansion and more by its ability to maintain competitive advantages in an increasingly crowded financing landscape. (More)

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HEADLINE OF THE WEEK

Private credit has grown from an alternative financing niche into a $2.56 trillion market, an eightfold increase from just $320 billion in 2012. But the bigger story isn't how fast the industry has grown. It's how deeply its risks are now embedded across the financial system.

The connections are multiplying. U.S. insurers hold approximately $807 billion in private credit investments, while major banks report at least $100 billion in exposure to private credit firms. Meanwhile, corporate borrower defaults hit a record 9.2%, according to Fitch. Add opaque valuations, payment in kind structures, and increasingly interconnected balance sheets, and credit stress becomes harder to identify before it spreads.

For PE sponsors and private lenders, this creates a delicate tradeoff. Private credit offers financing flexibility and access to institutional capital, but rising defaults and tighter scrutiny could challenge underwriting assumptions, refinancing strategies, and portfolio valuations. (More)

DEAL OF THE WEEK

Apollo Global Management is moving closer to completing its £5.7 billion ($7.6 billion) acquisition of easyJet, after shareholders overwhelmingly approved the transaction on November 11. The deal represents one of the largest private equity buyouts of a European airline and would end easyJet’s 26-year presence on the London Stock Exchange.

Under the agreement, Apollo will acquire the budget carrier for 715 pence per share, following a competitive bidding process against Castlelake, which had previously proposed 690 pence per share. The transaction secured support from 97.07% of scheme shares voted, with completion expected by the end of Q1 2027, subject to regulatory and court approvals.

Apollo’s investment thesis centers on accelerating easyJet’s existing strategy through fleet modernization, ancillary revenue expansion, loyalty programs, and the growth of easyJet Holidays. These initiatives offer potential opportunities to improve profitability and diversify earnings beyond traditional airline operations.

However, EU airline ownership regulations remain a significant hurdle, as European carriers must satisfy strict ownership and control requirements. The proposed transaction structure will therefore face scrutiny from European regulators.

The Bigger Picture: The acquisition highlights private equity’s continued appetite for undervalued UK-listed companies, while testing whether sponsors can generate attractive returns in capital-intensive, highly regulated industries such as aviation. (More)

IMPORTANT DEALS THIS WEEK

KPS Capital Partners → MM Packaging | €2.4B EV
KPS agreed to acquire 70% of MM Group’s packaging business, with MM retaining 30%. The carve-out creates a standalone packaging platform spanning more than 50 production sites across 19 countries, including a leading position in pharmaceutical packaging. Read more

Samsung Fire & Marine, KKR & KIC → Canopius | ~$2.2B reported for the remaining 60%
The consortium agreed to buy out shareholders including Centerbridge’s investor group, delivering a sponsor exit from the specialty insurer. Samsung’s ownership rises to 80.6%, while KKR and KIC take 12.1% and 7.3%, respectively; the reported price was not disclosed in Canopius’ announcement. Read more

KKR & Diamondback Energy → Deep Blue Midland Basin | ~$2.1B reported for Five Point’s 70% stake
KKR and Diamondback agreed to acquire Five Point Infrastructure’s interest in the Permian water-management platform. The deal secures critical water infrastructure for Diamondback and gives KKR a platform for further investment; official financial terms were undisclosed. Read more

Jacobs Private Equity II & co-investors → CKX Lands | $1B equity investment
Brad Jacobs’ firm agreed to invest $900M alongside $100M from minority co-investors, giving JPE majority control at closing. CKX will remain publicly listed and be renamed as a new acquisition platform in an industry still to be determined, rather than being taken private. Read more

Mubadala Capital → LSV Advisors | Undisclosed minority investment
Mubadala agreed to acquire a minority interest in the GP-led secondaries specialist, which manages approximately $5B in assets and commitments. The investment adds dedicated continuation-vehicle expertise to Mubadala’s partnerships and gives LSV long-term capital to expand. Read more

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