Sixth Street has closed its latest European direct lending fund at €3.75bn, hitting the hard cap and marking a major influx of capital into the region's private credit market. The San Francisco-based firm's European lending arm has grown rapidly, now managing over 75 transactions since 2015.

The fundraising underscores how private capital firms are stepping into roles once filled by traditional banks. Sixth Street’s move into a larger London office and growing team of 75 regional professionals reflects its expanding footprint. The firm leverages its $30bn TAO platform to offer deals between €30m and over €2bn.

Competition among direct lenders is escalating as companies seek alternatives to bank financing for complex deals. Sixth Street’s success mirrors broader trends in private credit growth, especially across cross-border transactions. Analysts expect further fund expansion as demand outpaces traditional lending capacity.

With $125bn in assets globally, Sixth Street is part of a generational shift in European finance. As regulations tighten for banks, private lenders are filling the gap with more flexible capital solutions.