Craig Nicol
Managing Director, Head of Global Credit Strategy
Jacob Walton
Portfolio Manager, Co-Head of European CLOs
Ludovic Walter
Portfolio Manager, Co-Head of European CLOs
Executive Summary
The outlook for 2026 is one of the most complex in recent memory. Credit spreads are extremely tight across investment grade and high yield in both Europe and the US, reflecting a supportive macro backdrop of strong US growth and a return to trend-like growth in Europe.
But headline valuations obscure how non-linear credit markets have become. Tight spreads are co-existing with a prolonged default cycle that is generating real dispersion across the investable universe – outcomes increasingly shaped by capital structure, documentation and access to liquidity rather than incremental changes in growth.
At its core, our view is simple:
The surface looks calm. The undercurrents, from the AI cycle to public-private convergence, will define where the real opportunities and risks lie in 2026.
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