UK asset management group M&G Investments has agreed to acquire a majority stake in P Capital Partners ( PCP ), a European private credit business in the corporate non-sponsor sector that supports entrepreneurs and family-owned businesses to grow and sustainable technologies to scale.

With origins dating back to 2002, PCP, the company says, boasts one of the longest track records in European direct lending, using the same cycle-tested investment process to invest in more than 170 companies.

The company specializes, it notes, in providing bespoke financing solutions to mid-sized businesses that often encounter challenges in securing loans through traditional channels and may not wish to sell equity stakes to fuel growth. PCP has also been offering sustainability-linked loans for the past decade and has a strong reputation for investing with purpose, which has gained traction with large institutional investors.

The company will become part of M&G’s £73 billion ( US$ 75.77 billion ) private markets business, complementing its established £19 billion private credit and structured credit teams and broadening its client offering in a segment where PCP already has strong relationships and an extensive origination network. Based in Stockholm with a team of 45, PCP has raised circa €7 billion since inception.

M&G will acquire 70% of PCP, with its management retaining the remaining equity stake following the transaction. There will be no changes to PCP’s management team or investment strategies as a result of the deal with M&G.

The acquisition, which is expected to close in mid-2025, further underpins, the company says, its strategic growth plans and cements its position as a leader in European private assets, adding differentiated investment and origination expertise, while strengthening PCP’s capabilities and plans for continued European expansion.

The global private credit market, valued at approximately US$1.5 trillion, has become an increasingly attractive asset class for institutional investors, driven by the potential for higher yields and diversification benefits. Estimates indicate that institutional allocations to private credit have grown by more than 10% annually, reflecting a broader trend to capitalize on the stability and returns offered by this asset class.

“P Capital Partners’ capability in the corporate non-sponsor sector and 20-year track record will offer our clients access to a wider range of differentiated offerings and improve our ability to better serve clients,” adds Joseph Pinto, M&G’s CEO. “Combined with our scale and distribution reach, it is a powerful, highly effective and distinctive combination.”