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European Mid-Market Monitor Q1 2026

  • 30th April 2026
  • Market Outlook & Analysis

Many private equity sponsors adopted a more selective stance in Q1 2026 amid AI-driven disruption in the software sector and continued geopolitical uncertainty. Yet deal pipelines are building, and our own activity remained strong across the quarter.

In this edition of our European Mid-Market Monitor, we examine the evolving dynamics of the software sector and what AI-driven change means in practice for direct lending portfolios.

We also turn the spotlight on Spain, one of Europe’s most compelling private credit opportunities. Sustained economic outperformance, a deep pool of family-owned mid-market businesses, and rapid growth in direct lending activity point to a market still in the early stages of private credit penetration. Since opening our Madrid office, Pemberton has established itself as a leading direct lender in the region, building long-standing relationships with active sponsors and a strong pipeline of quality opportunities.

Read more in European Mid-Market Monitor Q1 2026 below.

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