More capital set to flow into private debt and debt funds

Capital earmarked for equity investment is set to shift towards private debt and debt funds as real estate loans approach maturity, according to Guillaume Turcas, managing partner at Faro Capital Partners.

Speaking to Real Asset INSIGHT from the International Investors Lounge at EXPO Real 2026, Turcas said: “The good thing is the debt market is still pretty strong, thanks to obviously the major European banks that are still active in the real estate sector.”

Alternative lenders are supporting value-add transactions, while private debt is helping to fill financing gaps.

“I think what we will be seeing in the coming quarters is that more and more money that was supposed to be deployed in equity will be deployed in debt strategies, namely private debt but also debt funds, as a lot of financing is coming to an end.”

Beyond refinancing, Turcas also highlighted the funding needs of new transactions.

“And obviously for the new deals, when it’s not completely vanilla, you will need to find some alternative money to help with that.”