Key facts
- U.S. direct lending issuance fell to $44.76 billion in the three months ended May 2026.
- Issuance to private equity-backed borrowers dropped nearly 37%.
- Direct lending volume tied to leveraged buyouts fell about 34%.
- Investor commitments to private credit funds were $45 billion in the first four months of 2026.
- Private credit flows fell 35% month-on-month in May.
The rapid expansion of private credit is losing momentum, with U.S.-focused direct lending issuance slowing and fundraising remaining below recent peaks. PitchBook data shows new loan issuance by private credit lenders fell to $44.76 billion in the three months ended May 2026, a decrease of about 40% from $74.56 billion in the first quarter. Issuance to private equity-backed borrowers dropped nearly 37% to $28.5 billion, while direct lending volume tied to leveraged buyouts fell about 34% to $15.15 billion. This suggests a more cautious phase for the industry, influenced by softer fundraising, elevated redemption requests, closer scrutiny of loan quality, and renewed competition from cheaper syndicated loan markets. Concerns over loan quality have been amplified by weakness in software debt. Broader private credit fundraising also remained subdued, with investors committing $45 billion to funds in the first four months of 2026, little changed from the previous year but below 2023 levels. Retail flows have also softened, with private credit flows down 35% month-on-month in May.