Key takeaways
- What it is: private credit is money that investment funds lend to companies and projects outside the banking system. The loans are negotiated privately, usually pay a floating rate and stay with the lender until they are repaid.
- Market size: about $4.1 trillion of assets at the end of 2025, up 17% for the second year running, by the Alternative Credit Council's count.
- Returns: US middle-market direct loans paid 10.4% in interest in 2025 and returned 9.3% after losses.
- Who lends: Private Equity List tracks 242 private credit and debt firms. 138 are in the US and 32 in the UK.
- New money in 2026: 26 new private credit funds so far this year, with $23.2B in total. The typical fund is $596M.
- The risk: Fitch's US private credit default rate hit a record 6.3% in the year to September 2026, mostly from deferred interest and extended loans.
 United States | |
|---|---|
 United Kingdom | |
 Canada | |
 India | |
 France | |
 Hong Kong | |
 Australia | |
 Luxembourg | |
 Switzerland |
Source: Private Equity List database
| $100M+ | 54 | 22.3% |
|---|---|---|
| $50–100M | 54 | 22.3% |
| $10–50M | 104 | 43.0% |
| Under $10M | 30 | 12.4% |
Source: Private Equity List database
What is private credit: lending by investment funds
Definition: private credit is money that investment funds lend directly to companies, outside the banking system and the public bond market.
Private debt: the same thing under another name. "Private debt" is more common in Europe and in fund reports; "private credit" in the US press.
Who borrows: mostly mid-sized companies with $10M–$1B of annual revenue, many of them owned by private equity firms (Federal Reserve).
Who lends: asset managers such as Blackstone, Ares, Golub Capital and Monroe Capital. They raise funds from pension funds and insurers, lend the money out and pass the interest back.
Why "private": the loan is agreed between the borrower and one lender or a small group of lenders. It is not rated, listed or traded on an exchange.
Illustrative example, not data: a private equity firm buys a software company for $300M. It puts in $150M of equity and borrows $150M from a direct lending fund at the base rate plus 5.5%. The company pays interest every quarter, and the fund gets its money back when the loan matures or the company is sold.
How private credit works: from the investor to the borrower
1. A manager raises a fund: pension funds, insurers, endowments and wealthy individuals commit money for 5–10 years. Monroe Capital's Private Credit Fund V, at $2.8B, is the largest 2026 direct lending fund in Private Equity List.
2. The fund finds borrowers: most loans come through private equity firms that need debt for a buyout. Others come from founders, family-owned companies and independent sponsors.
3. It underwrites the loan: the lender studies the company's cash flow, sets the amount, the price and the covenants, and takes security over the company's assets.
4. The borrower pays a floating rate: almost all private credit loans pay a base rate such as SOFR plus a fixed margin (Federal Reserve). When rates rise, the interest rises too.
5. The lender holds the loan: it does not sell the loan on, so the same lender negotiates if the borrower gets into trouble.
6. The money comes back: at maturity, at a refinancing or when the company is sold. The fund then returns capital and interest to its investors.
Loan size: the average private credit loan has been above $80M since 2022 (Federal Reserve).
Speed and certainty: a single lender can agree terms in weeks, and the price does not move with the bond market before closing. Private equity firms use it for that reason.
Types of private credit: eight strategies, all raising in 2026
Private credit is a family of strategies. The table shows what each one lends against, with a fund from the Private Equity List tracker that raised money for it this year.
| Strategy | What it lends against | Typical borrower | 2026 example |
|---|---|---|---|
| Direct lending | A company's cash flow, senior secured | Private equity-owned mid-sized companies |  Monroe Capital, $2.8B |
| Mezzanine and junior debt | Cash flow, ranked behind senior loans | Buyouts that need more debt |  Churchill, $1.54B |
| Capital solutions and special situations | Flexible debt and preferred equity | Companies that need to refinance or restructure |  Arcmont, $1.65B |
| Asset-based finance | Equipment, leases, receivables, consumer loans | Finance companies and asset owners |  Oaktree, $2B |
| Infrastructure and climate credit | Power, transport, data and energy projects | Project companies and developers |  I Squared Capital, $3B |
| Real estate debt | Buildings and property loans | Property owners and developers |  Nuveen, $700M |
| Venture and growth debt | Recurring revenue and equity backing | Venture-backed startups and scale-ups |  Claret Capital Partners, $632.5M |
| Credit secondaries | Existing stakes in credit funds | Investors selling fund stakes early |  HarbourVest, $2.4B |
Direct lending is the core: about half of the market, around $800B, by the Federal Reserve's estimate (Federal Reserve).
Unitranche: one loan that replaces separate senior and junior debt. Golub Capital and Churchill offer it; more in our guide to private equity lenders.
Mezzanine: junior loans that often come with warrants; 59 firms are in our guide to mezzanine lenders and funds.
Venture debt: loans to startups that would rather not sell more equity; see venture debt lenders.
Private credit returns: about 9–10% a year
What lenders earned: US middle-market direct loans paid 10.4% in interest income in 2025 and returned 9.3% for the year, by the Cliffwater Direct Lending Index of about 21,000 loans (Cliffwater).
Where the return comes from: the base rate, plus a margin for lending privately to smaller companies, plus fees charged when the loan is made. Losses from defaults come off the top.
Extra over bank loans: the margin private credit charges over syndicated leveraged loans narrowed to below 200 basis points before widening again in 2023 (Federal Reserve).
Rates cut both ways: floating rates lifted returns when rates rose after 2022. When base rates fall, so does the interest income.
Investor returns are lower: fund management fees and performance fees come out before investors are paid, so a fund's net return is below the loan yield.
Private credit vs bank loans, bonds and private equity
| Private credit | Bank loan | High-yield bond | Private equity | |
|---|---|---|---|---|
| Who provides it | A fund or a small group of funds | A bank, often syndicated to other lenders | Many investors in a public market | A fund that buys a stake |
| What the investor gets | Interest and fees | Interest and fees | A fixed coupon | Profit when the company is sold |
| Rate | Floating, base rate plus margin | Floating | Usually fixed | No rate, equity return |
| Rank if things go wrong | Usually senior, secured | Senior, secured | Often unsecured | Last, after all lenders |
| Traded | No, held to maturity | Sometimes, in the loan market | Yes, daily prices | No |
| Speed to close | Weeks | Weeks to months | Months, with a rating and prospectus | Months |
Private credit vs private equity: a credit fund lends and earns interest; a private equity fund owns part of the company and earns its return on the sale. Blackstone, Apollo, KKR and The Carlyle Group run both kinds of funds.
Why banks lost share: after 2008, capital rules made leveraged loans more expensive for banks to hold. Funds stepped into mid-market lending, and the market roughly matched the $1.4 trillion leveraged loan market by 2023 (Federal Reserve).
Public credit: bonds and syndicated loans that trade, with ratings and daily prices. Private credit trades that liquidity for a higher margin and closer terms with the borrower.
Who invests in private credit and how to get access
Pension funds: about 31% of private credit fund assets, the largest group (Federal Reserve).
Insurers: about 9%, attracted by long-dated income that matches their liabilities. A leading insurer backed Granite Asia's 2026 pan-Asia credit strategy (announcement).
Individuals: about 9% of assets in the same data. Most invest through business development companies (BDCs), interval funds and other evergreen vehicles that offer limited redemptions.
Development lenders and sovereign funds: IFC and the Indonesia Investment Authority anchored Allianz Global Investors' Asia-Pacific infrastructure credit fund (announcement).
How to invest: institutions commit to closed-end funds; individuals mostly buy listed or non-traded BDCs and interval funds through a wealth manager. Check the redemption terms first: evergreen funds can cap withdrawals in a quarter.
Private credit risks: defaults, leverage and liquidity
Defaults are rising: Fitch's US private credit default rate reached 6.3% in the 12 months to September 2026, a record, up from 6% in the second quarter (Investment Executive).
Mostly soft defaults: most of Fitch's events were interest paid in kind, deferrals and stressed maturity extensions, not bankruptcies.
A narrower index is lower: Proskauer's index of 746 senior and unitranche loans showed a 2.41% default rate in the third quarter of 2026, down from 2.51% (Alternative Credit Investor).
Thin interest cover: private credit borrowers earned about 2.0 times their interest costs in 2023, against 2.7 times for leveraged loan borrowers (Federal Reserve).
Hidden prices: loans are valued by the manager, not by a market, so losses can show up late.
Liquidity: investors cannot sell a closed-end fund stake easily. Credit secondaries funds such as HarbourVest's $2.4B strategy buy those stakes, usually at a discount.
Leverage on the funds: private credit funds carried about $399B of borrowing, roughly 25% of net assets, while 41% of flagship corporate lending funds surveyed used none (AIMA).
Private credit market size and growth: $4.1 trillion
Size: $4.1 trillion of assets under management at the end of 2025, by the Alternative Credit Council, the private credit arm of hedge fund body AIMA (AIMA).
Growth: 17% a year in both 2024 and 2025; fundraising in the first half of 2026 was the highest in five years, by the same survey.
Narrower counts are smaller: the Federal Reserve put the market at nearly $1.7 trillion in 2023, using Preqin data on closed-end funds only. Estimates differ because some include real estate and infrastructure debt and some do not.
New funds keep coming: Private Equity List recorded 26 new private credit funds in 2026, nine of them $1B or larger. North American managers raised 12 of them and $17.2B of the money.
Who lends: new private credit funds of 2026
The 26 funds come from Private Equity List fund records and verified announcements in the new-funds tracker. The biggest, with sizes as announced:
| Firm | Fund | Size | Strategy |
|---|---|---|---|
| I Squared CapitalInfrastructure investor with more than $60B of assets. | ISQ Global Infrastructure Credit Fund II (final close) | $3B | Infrastructure credit |
| Monroe Capital | Private Credit Fund V | $2.8B | Direct lending |
| HarbourVest Partners | Private credit secondaries strategy (initial closings) | $2.4B | Credit secondaries |
| Oaktree Capital Management | Asset-Backed Finance Fund (final close) | $2B | Asset-based finance |
| Arcmont Asset Management | Capital Solutions Fund II | $1.65B | Capital solutions |
| Churchill Asset Management | Junior Capital Opportunities Fund III | $1.54B | Junior debt |
| Sound Point Capital Management | Strategic Capital Fund III | $1.5B | Capital solutions |
 Brigade Capital Management | Private Credit Solutions Fund | $1B | Capital solutions |
 Nuveen Green Capital | CPACE Lending Fund IV (first close) | $1B | Real estate debt |
| Nuveen | Australian commercial real estate debt strategy (announcement) | $700M | Real estate debt |
 Ascertis Credit | Ascertis Credit Fund IV (announcement) | $700M | Direct lending |
| Neo Alternative Asset Managers | Neo Special Credit Opportunities Fund II (announcement) | $654M | Special situations |
| Claret Capital Partners | European Growth Capital Fund IV (announcement) | €575M ($632.5M) | Growth debt |
 Eagle Point Credit Management | Defensive Income Fund III | $559M | Structured credit |
 Granite Asia | Libra Hybrid (target passed) | $500M | Direct lending |
| responsAbility | Asia Climate Fund (closed) | $461M | Climate credit |
 Canyon Partners | CLO Fund IV | $400M | Structured credit |
 Homestead Capital | Agriculture private credit fund (first close) | $350M | Direct lending |
Smaller 2026 funds: 
Allianz Global Investors ($270M first close, Asia-Pacific infrastructure credit), 
Colesco Capital (€240M, climate credit), 
Lendable ($255M, fintech credit), 
BlueOrchard ($250M first close), 
Orbit Capital (€107M, growth debt), 
FSE Group ($88.9M, London scale-up loans), Recur Club ($60M, D2C brands) and 
Edge Growth ($22M first close).
Full list of lenders: all 242 firms by region, with the largest by assets, are in our guide to private credit funds and firms.
Private credit lenders by region
United States: 138 of the 242 firms. Big multi-strategy managers (Blackstone, Apollo, Ares, KKR) sit next to specialists such as Golub Capital, Antares Capital and Monroe Capital.
United Kingdom: 32 firms, almost all in London, including Intermediate Capital Group, Arcmont and Pemberton.
Continental Europe: France (7), Luxembourg (4) and Switzerland (4) lead; Kartesia and Capital Four lend across the region.
Asia-Pacific and Canada: Canada and India have 11 firms each, Hong Kong and Australia 5 each. In 2026, Ascertis, Neo and Granite Asia raised Asian credit funds.
Cheque sizes: 104 of the 242 firms write $10–50M; 54 write $100M or more.
How to find private credit lenders for a deal
Start with the type: the debt funds list in Private Equity List holds all 242 firms with profiles, cheque sizes and team contacts.
Filter: in search, narrow by sector, headquarters and cheque size.
Check who just raised: a fund that closed this year has money to lend. The new funds tracker lists each one as it is announced.
Pick the strategy: for buyout debt see private equity lenders; for one-off deals see independent sponsors; for selling a company see private equity buyers.
Plans and exports: profile contacts and CSV export depend on the plan; see pricing.
Data and methodology
Firms: the 242 are Private Equity List profiles tagged as debt funds, counted on 12 November 2026; headquarters and cheque sizes are as on each profile.
Funds: 26 private credit funds launched or announced from 1 January to 11 November 2026, from Private Equity List fund records and verified tracker announcements; funds were checked by name and announcement, and sizes are as announced.
External figures: market size, returns, default rates and investor shares come from AIMA, Cliffwater, Fitch, Proskauer and the Federal Reserve, linked in the text. Private Equity List did not calculate them.
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