Capital Call Finance – Outlook 2026
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Article Type
Insights
Topics
Long-Term Outlook, Opinion
Published
February 17, 2026
Read time
6 mins
Authors
Bas Kragten
Jules Koekkoek
Vincent Kroes
Philip van der Meijden
Remco van Amelsfoort
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Resilience and relative value amid uncertainty in 2026

 

The macroeconomic picture for 2026 is one of cautious optimism. However, ongoing geopolitical developments mean that uncertainty is likely to persist. In this context, maintaining both flexibility and caution will remain essential.

 

Private markets continue to attract growing interest from both institutional investors and high-net-worth individual investors, signaling rising allocation levels in the years ahead. In private equity, the dispersion of expected returns is widening, increasing the importance of manager, vintage, and strategy selection. Indications of increased M&A activity are visible, which should result in more exit opportunities for maturing investments. Secondaries markets continue to expand rapidly, with record inflow and trading volumes in 2025. This strong bid provides a solid floor to private equity valuations. Private debt performance remains resilient, while valuations are reaching peak levels, in line with trends across broader credit markets. We observe a gradual rise in corporate defaults, which introduces greater downside risk. Infrastructure markets continue to grow rapidly, supported by large scale structural developments in energy transition and digitalization.

 

Capital call finance market ends 2025 on solid ground

What began as a year clouded by uncertainty, ended with fundamentals proving remarkably resilient. Positive market momentum was supported by continued inflows and the rising popularity of private market funds. Against this backdrop, the performance of capital call financing remained strong.

 

Throughout the year, we observed a rising appetite among lenders for the asset class, both from existing bank lenders and from rapidly increasing allocations across a broad range of non-bank lenders. These non-bank lenders span diverse investor types and jurisdictions, including pension funds, insurance companies and neo-banks across Europe and the UK.

 

Relative value versus public fixed income

 

Past performance does not predict future returns. Source: Aegon Asset Management, Barclays, Bloomberg,as of December 2025. All yields in EUR (except UKT Govt Bonds) and gross of fees. Spreads on 6m Euribor basis * Aegon AM investment team performance since 2018 Data as of Dec 2025; ** Barclays Euro AAA Government Bond Index (LET8STAT); *** Barclays Euro Aggregate 1-3 yr Corporate Bond Index (LEC1TREU).

While the asset class gained broader popularity, fund borrowings remained somewhat constrained during 2025.

 

The supply demand ratio has resulted in significant spread compression, a development consistent with trends across broader credit markets and one that continues to support the relative value of the asset class versus liquid credit.

 

Returns in the asset class were largely driven by carry with spread compression resulting in limited mark to market gains due to the short credit duration profile of the asset class.

 

Capital call finance: Continuing to deliver relative value in 2026

Capital call finance enters 2026 on a solid footing. While supply has been somewhat subdued in recent months due to developments in underlying markets, a clear increase in activity is emerging.

 

Spread compression continues into early 2026. Despite this spread compression, capital call finance remains an attractive relative investment opportunity, offering a consistent spread pickup of 125-130 bps versus short term IG corporate bonds.

 

We continue to observe growing activity in the term loan market. Both borrowers and banks are increasingly sensitive to arguments to combine more traditional RCFs with term loan tranches. In the USD market, and gradually more in the EUR markets as well, we observe maturities of these term loans extending to 2, 3 or 4 years, with limited pick-up in spread.

 

Credit performance is expected to stay strong with credit deterioration remaining largely absent. This strong performance reflects both the robust structural features of the capital call facilities, with backing of a high quality and diversified LP base, and the continued solid performance of private market funds.

 

Conclusion: Attractive relative value amid uncertainty

Despite macro uncertainty and geopolitical risks, capital call finance heads into 2026 from a position of strength. Fundamentals remain solid, technicals are supportive, and valuations look attractive relative to corporate credit. Late-cycle dynamics reinforce the need for caution, proactive management and structural protection. All these elements are driving interest in the asset class with its short duration continuing to offer stability, flexibility and liquidity in uncertain times.

Important information

Authors

Bas Kragten
Head of fund finance
Bas Kragten is head of fund finance and infrastructure debt. As part of the combination between Aegon NL and a.s.r., Bas joined Aegon AM from a.s.r., where he was head of structured investments.
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Jules Koekkoek
Senior Portfolio Manager
Jules Koekkoek is an investment manager in the fund finance & renewable infrastructure debt team. As part of the combination between Aegon NL and a.s.r., Jules joined Aegon AM from a.s.r., where he was an investment manager in the structured investments team.
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Vincent Kroes
Senior Portfolio Manager
Vincent Koes is an investment manager in the fund finance & renewable infrastructure debt team.
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Philip van der Meijden
Senior Portfolio Manager
Philip van der Meijden is an investment manager in the alternative fixed income & structured finance department, where he splits his time between fund finance & renewable infrastructure debt and Dutch mortgages.
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Remco van Amelsfoort
Senior Portfolio Manager
Remco van Amelsfoort, CFA, is an investment manager in the fund finance & renewable infrastructure debt team.
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