European high yield entered 2026 with a compelling combination of resilient fundamentals, attractive carry and supportive technicals - yet also with enough dispersion to reward informed, selective investing. Against this backdrop, DPAM’s active, research‑driven philosophy may offer a distinct advantage for investors seeking stable income, downside protection and opportunities for incremental alpha.

For much of the past five years, EU small caps have lived in the market’s coldest corner. 2025 effectively marked a fifth consecutive year in which smaller European companies lagged their large-cap peers, an anomaly that defies decades of market patterns.

European private credit has become a central source of financing for the real economy, supported by tighter bank lending standards and persistent corporate funding needs. Within this universe, senior direct lending continues to stand out as a conservative strategy for investors focused on contractual income generation and downside protection.