4 minute read
2025 Highlights
Despite ongoing economic and geopolitical uncertainty, the UK private placement market saw increased momentum in 2025, with many borrowers favouring longer-term funding amid relative stability in interest rates and valuing diversification of capital providers.
Corporate M&A activity was a driver for issuance and shelf facilities were key, with companies drawing on existing shelves and establishing new ones to support future acquisitions.
In direct lending, sponsored activity continues to grow and benefit from further bank retrenchment, while non-sponsored solutions remain attractive for shareholders and management teams seeking flexibility.
Private Placements
Private placement activity was buoyed by relative stability in long-term fixed-rates, tighter credit spreads, and increased M&A activity, with funding enabling companies to term out acquisition debt. Shelf facilities were instrumental, both in supporting immediate M&A needs and in positioning companies for future transactions.
Sector exposure was broad, with a rise in traditional corporate issuers and an even split between new and existing borrowers, reinforcing the significance of long-term partnerships. The majority of deals were bilateral or direct, highlighting the value of our relationship-driven approach.
Of note, the team completed a landmark transaction in the sports sector, making PGIM one of the first institutional lenders to provide financing to a Premier League club. This deal required extensive collaboration with both the league and the club. Our ability to deliver full financing requirements with longer term capital vs. a traditional bank facility, along with our relationship-based approach, were key to the partnership. This investment in the UK expands our growing global sports investment portfolio and we anticipate this being a sector that may present further opportunities in the future.
Whilst investment grade origination remained robust, below investment grade issuance performed particularly strongly, highlighting our ability to provide private placement funding to borrowers across the credit spectrum.
Direct Lending
2025 saw notable portfolio activity in Direct Lending, with several add-on transactions supporting bolt-on acquisitions, recapitalisations, and growth financing. This was complemented by continued expansion in new-name activity, with a balanced mix of sponsored and non-sponsored transactions.
Our non-sponsored lending capabilities remained a key differentiator to shareholders and management teams, offering flexible solutions in a quieter sponsored LBO environment.
Junior Capital
Activity levels in the UK and Ireland during 2025 were measured, with many companies delaying transformational transactions amid ongoing macroeconomic and political uncertainty. This contributed to lower junior capital issuance in the region compared to other regions across PGIM’s global junior capital platform. Despite this environment, our focus on disciplined portfolio management supported healthy capital returns through refinancings.
Real Assets
The infrastructure market was active, driven by digital infrastructure and the energy transition. Digital infrastructure gained momentum, with increased activity in towers and data centres, and the broader energy sector presented several opportunities, particularly in oil & gas, as banks continued to retrench. Core infrastructure activity remained robust, evidenced by various closed transactions in the UK.
The team also completed a first football stadium financing transaction in the UK, demonstrating the opportunity for both real asset and corporate finance solutions within the sector.
Outlook for 2026
If current market conditions and geopolitical uncertainty persist, we expect borrowers to continue to seek longer-term funding, diversification in funding sources, and flexible capital solutions to mitigate risk. Institutional lenders, like PGIM, are well positioned to provide alternative financing solutions for borrowers, versus traditional bank financing.
In Direct Lending, we anticipate continued growth in deployment for 2026, supported by a large pipeline of sponsored companies seeking to transact and an expanding appetite for both sponsored and non-sponsored opportunities. We also see the market environment as likely to be more positive for junior capital needs in 2026.
In Real Assets, the energy transition, and digital infrastructure, notably data centres and fibre networks, are likely to remain key growth areas, driven by refinancing and additional CapEx requirements. That said, traditional core infrastructure will also continue to require ongoing funding to support investment in growth and resiliency.
Our relationship-driven approach remains central to our strategy, enabling us to deliver tailored, flexible solutions for borrowers and stakeholders.
Transaction Highlights
Meet the Team
