Monetary Matters with Jack Farley Lending Where the Banks Won’t Go: What’s Fueling Europe’s Growing Real Estate Private Credit Market?
May 12, 2026
Thomas Lloyd-Jones, co-founder and CIO of Zenzik Capital, a London-based real estate and asset-backed private credit specialist. He explains why banks are retreating across Europe and how that gap fuels opportunistic lower-middle-market and transitional real estate lending. They discuss regulatory shifts, where traditional lenders won’t go, and the types of loans that create attractive premia for active credit managers.
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Underwrite From The Downside And Be An Active Lender
- Do underwrite from the downside: design loan sizing and security so you can recover capital even if lease‑up fails.
- Actively manage business plans post-deal with milestones, TI guidance and refinancing help to protect outcomes.
Granular Lower Middle Market Portfolio Construction
- Zenzik targets smaller deals (€5–50m hold) and aims for a more granular pool with 20–25 positions minimum to reduce idiosyncratic risk.
- They prefer shorter‑term, reinvestable evergreen structures rather than graduating to larger tickets.
Start With Good Borrowers Then Nail Structure
- Avoid bad credits by starting with borrower quality: insist on capability, track record, and character before underwriting structures.
- Then add contractual protections: covenants, asset charges, cash sweeps and account restrictions to eliminate losers.