The M&A market is normalising, said Matt Theodorakis, co-head of European direct lending at Ares, in the latest ‘Credit Exchange’ podcast, recorded at the SuperReturn International conference in Berlin, Germany.

“People are looking to do deals going forward” after taking a pause following ‘Liberation Day’, Theodorakis told host Lisa Lee, managing editor at Creditflux.

Investors – limited partners – are going to want to get paid back. In the next six to twelve months, their patience is going to wear thin, Theodorakis said. “People are going to really start to push and say, ‘Hey, guys, enough. There’s no reason not to start a sale process.’ We’ll actually enjoy the benefit of that.”

Before that, 2025 started out as a strong year. Direct lending in Europe has been deploying almost 50% more than a year ago, and the use of proceeds for M&A has been increasing.

Theodorakis is particularly extied about how artificial intelligence can impact the private credit business, particularly from the perspective of risk management. As a lender, Ares gets quality and frequently-updated information on their borrowers.

“We’ve been doing a pretty good job of it, but if we can turn that info into machine learning [and] getting ahead of trends, that is an absolute game-changer.”