Thursday, 9 April 2026
Europe’s private credit market is entering a more disciplined phase after a prolonged period of expansion, with Romania reflecting the broader shift while maintaining its own structural characteristics. Rising borrowing costs, slower transaction activity and heightened geopolitical uncertainty have collectively reshaped investor behaviour, pushing capital providers towards more selective and risk-aware strategies.
Across Europe, private credit has remained an established asset class, but the conditions that supported rapid growth have weakened. Tighter monetary policy has kept financing costs elevated, while reduced deal volumes have limited exit opportunities and constrained liquidity. At the same time, renewed geopolitical tensions, including the conflict involving Iran, have added inflationary pressure and reinforced a reassessment of risk across both public and private markets.
Within this environment, Romania presents a distinct case. According to Andrei Drosu, Director Capital Markets at iO Partners, private credit remains relatively underdeveloped locally. He notes that while several players have attempted to establish a presence, their impact has been limited, leaving the segment uncommon in the Romanian market.
This is largely due to the continued strength of the banking sector. Drosu explains that banks remain highly active and competitive in providing real estate financing, offering pricing that is often more attractive than private credit structures. He points to large-scale transactions in 2025, where developers such as AFI Europe and Iulius Group secured loans ranging between €300 million and €550 million, highlighting the capacity of traditional lenders to support major projects.
In this context, private credit in Romania is not positioned as a direct substitute for bank financing. Instead, it functions as a complementary solution, typically used in situations where bank lending is constrained or unable to address specific structuring needs.
Investor appetite for private credit is nevertheless evolving. Valentin Neagu, Managing Director at Crosspoint Real Estate, observes that interest in the asset class is gradually increasing, although growth remains moderate due to ongoing economic and geopolitical uncertainty. He notes a clear shift in investor behaviour, with capital deployment now focused on stronger downside protection, tighter collateral requirements and greater visibility on exit strategies.
Neagu also highlights the growing role of domestic capital in Romania, which is now more active than at any point in the past decade. This trend, combined with increasing intra-regional investment flows across Central and Eastern Europe, has helped strengthen market resilience, even as international investors adopt a more cautious and selective approach.
Higher interest rates and reduced liquidity have further influenced decision-making across private markets. According to Neagu, investors are showing a preference for familiar markets and are taking longer to complete transactions. While international capital has become more selective, domestic investors are increasingly filling the gap, particularly in mid-market deals where local expertise and execution speed provide a competitive advantage.
Reduced liquidity in exit markets is also creating opportunities for private credit. Assets that cannot be sold at acceptable pricing levels still require financing, opening the door for structured capital solutions that were less visible during periods of higher liquidity.
Across the region, geopolitical developments are playing a more prominent role in shaping investment decisions. Neagu points to the growing influence of political events, including elections, on real estate activity across neighbouring markets, underscoring the interconnected nature of capital flows within CEE.
This shift towards selectivity is echoed in broader research. Vlad Saftoiu, Head of Research at Cushman & Wakefield Echinox, notes that investor appetite has moved away from broad risk-taking towards more disciplined, data-driven underwriting. While fundraising volumes have increased globally, capital is becoming more concentrated among larger managers, with a stronger emphasis on protecting portfolios against uncertainty.
Saftoiu adds that volatile interest rates and uneven liquidity have heightened sensitivity to exit and refinancing risks, pushing investors towards assets with strong income visibility and resilient cash flows. In Romania and across the wider CEE region, this has translated into a clear preference for quality, with secondary assets facing widening pricing gaps.
Looking ahead to the second half of 2026, market participants expect this trend to continue. Neagu anticipates that private credit activity will concentrate on clearly defined segments. Prime office assets in Bucharest with strong occupancy, industrial and logistics properties supported by stable income, and well-performing retail schemes in regional cities are expected to attract capital. At the same time, opportunities are emerging in value-add and opportunistic strategies, including under-leased office assets, redevelopment projects and structured residential financing.
Saftoiu similarly expects investors to prioritise assets with durable cash flows and lower capital requirements, with housing and industrial sectors continuing to draw strong interest at a European level.
Despite these developments, private credit in Romania remains closely tied to the availability and competitiveness of bank financing. As long as traditional lenders continue to provide attractive terms and large-scale funding, alternative financing is likely to remain a targeted tool rather than a mainstream solution.
For investors, the current environment signals a transition rather than a contraction. Private credit continues to play a role in bridging financing gaps and supporting complex transactions, but success increasingly depends on disciplined capital deployment, careful risk assessment and the ability to navigate a market shaped by both economic and geopolitical uncertainty.
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