Our Special Situations investment team looks at the questions marks over the health of developed Europe as we enter 2025, and the resulting opportunities in the European mid-market.
Key takeaways:
Key trends in 2024 for European Special Situations markets were the rise of co-op agreements, economic divergence of the European business cycle from the US, and capital market activity.
The outlook for 2025 in Europe is fraught with uncertainty due to economic weakness, political instability, particularly in France and Germany, and layoffs in key economies.
The middle market, where our focus lies, is particularly vulnerable due to its lower resilience, lack of diversification, and a reliance on bank funding.
Sectors that present opportunities and are ones-to-watch in 2025 are business process outsourcing, autoparts, utilities, and energy & shipping.