Over the past three years, the high-yield segment of the fixed income market has enjoyed a supportive backdrop. As of October 15, 2025, euro-denominated high yield bonds - across all maturities and ratings - delivered a cumulative three-year return of +33.4%, while maintaining relatively low volatility. After seeing limited investor interest until 2023, the asset class has seen a return to positive net inflows since early 2024.
While these figures are well known to market participants, certain aspects of the European high‑yield space remain less familiar – for example, issuer profiles. Nearly half of the total issuance in this market comes from publicly listed companies. Another 23% originates from businesses owned by private equity funds, typically in the context of leveraged buyouts (LBOs). About 4% is issued by companies owned by public entities, and the remaining quarter generally comes from founder- or family-owned firms.
Our analysis
Contrary to common perception, the European high‑yield market features a significant share of large issuers: more than one‑quarter of issues originate from listed large‑cap companies. For bondholders, listed firms generally carry a more moderate risk profile than unlisted companies, benefiting from more diversified funding sources and typically lower leverage. It should be noted that several issuers in the European high‑yield space have benefited from an initial public offering (IPO) since the start of the year, raising equity capital and strengthening their balance sheets.
The segment’s substantial base of small companies also offers opportunities, best identified through in‑depth market expertise.
Written on October 17, 2025. Opinions subject to change. This document has no pre-contractual or contractual value. It is provided for information purposes. The analyses and/or descriptions contained in this document should not be considered as advice or recommendations from Lazard Frères Gestion SAS. This document does not constitute a recommendation to buy or sell securities, nor does it encourage investment. This document is the intellectual property of Lazard Frères Gestion SAS - 352 213 599 RCS Paris 25, RUE DE COURCELLES - 75008 PARIS
