Why European Private Lenders Are Betting Big on the ‘Sell America’ Movement

The "Sell America" movement—a seismic shift in global capital flows—has turned traditional investment logic on its head. Once the world’s top destination for foreign capital, the U.S. now faces a historic exodus of foreign investors, driven by tariffs, trade imbalances, and eroding economic confidence. Yet amid this turmoil, European private lenders are seeing opportunity. With favorable debt conditions, strategic M&A targets, and a rush to bypass U.S. trade barriers, European private equity (PE) firms and their lenders are poised to dominate a sector once considered off-limits.

The Rise of the ‘Sell America’ Movement

The movement, as detailed in recent analyses, reflects a global reallocation of capital away from the U.S. economy. Foreign investors are selling U.S. stocks, bonds, and real estate, driven by policies like the Trump-era tariffs, which aimed to rebalance trade but instead weakened the dollar and fueled investor skepticism. By 2025, the U.S. goods trade deficit had swollen to $1.2 trillion, while its manufacturing sector’s global output share plummeted to 17.4%—a stark decline from 28.4% in 2001.

The S&P 500’s underperformance against global markets in 2025 further fueled the exodus. Asian and European equities surged, while U.S. stocks faltered, signaling a broader loss of investor confidence.

European Private Lenders: A Key Player in the Shift

European private lenders are not fleeing the U.S.—they’re doubling down. Their strategy revolves around three pillars:

1. Tariff Mitigation via Acquisitions:
   With U.S. tariffs averaging 10–25% on EU exports, mid-market European firms are buying U.S. assets to “produce locally for local markets.” The research highlights that PE-backed companies are targeting add-on acquisitions in the U.S., creating “global platforms” to avoid tariffs. For instance, a European industrial firm might acquire a U.S. manufacturing plant to serve American customers directly, bypassing import duties.

1. Cross-Border M&A Opportunities:
   U.S. strategic buyers accounted for 33% of exits for European PE-backed companies over the past three years, drawn by higher U.S. equity valuations and a strong dollar. European lenders are now leveraging this flow in reverse, financing U.S. acquisitions by European firms.

2. Debt-Friendly Financing:
   The European leveraged loan market, which issued €107 billion in broadly syndicated loans (BSL) in 2024, offers cheap capital for cross-border deals. BSL spreads of ~400 basis points remain attractive, with private credit funds competing fiercely to underwrite U.S.-focused transactions.

Sector-Specific Plays

The “Sell America” movement isn’t uniform—it’s sector-specific. European lenders are targeting industries where U.S. assets offer the best risk-adjusted returns:

• Technology & Software:
  U.S. software firms trade at 20x+ EBITDA, versus European peers at 11x. European PE firms like CVC Capital are acquiring U.S. tech companies to tap into higher valuations.

• Industrials & Manufacturing:
  With U.S. manufacturing recovery outpacing Europe’s post-pandemic slump, European lenders are funding acquisitions in non-cyclical industrial sectors.

• Consumer Goods:
  Beauty and wellness brands in the U.S. are prime targets, as European firms seek to avoid tariffs on imported goods.

Risks and Challenges

The strategy isn’t without pitfalls. Geopolitical risks loom large:
- Trade Policy Uncertainty: New tariffs or retaliatory measures could upend supply chains.
- Structural Risks: European lenders must navigate “lender-on-lender” conflicts in restructurings, especially in cross-border deals.

Conclusion: A Bold Bet with Data on Its Side

European private lenders are betting that the “Sell America” movement will persist—and they have the numbers to back it. By 2025, U.S. M&A volumes are projected to grow by 25%, outpacing Europe’s 5% increase. With European PE firms already recycling capital through continuation vehicles (CVs) and accessing cheap debt, their U.S. investments are likely to outperform.

The data is clear:
- €107 billion in European leveraged loans in 2024, with spreads at ~400 bps, provide ample liquidity.
- 33% of European PE exits are bought by U.S. firms—a trend that will reverse as European lenders acquire U.S. targets.
- The S&P 500’s underperformance relative to global markets (e.g., STOXX 600 at 11x vs. 16x for the S&P) creates valuation arbitrage opportunities.

In a world where the U.S. economy is losing its shine, European private lenders are emerging as the new kings of cross-border capital. Their calculus? Risk is worth it when the alternatives—tariffs, trade wars, and dollar weakness—are even costlier.

The “Sell America” movement isn’t just a trend—it’s a tectonic shift. And European private lenders are ready to ride the waves.