Key facts
- Private credit funds raised a record $129.15 billion in the first nine months of 2026.
- Third-quarter lending volume fell 28% year-on-year to $49.77 billion.
- Borrowers are returning to the syndicated loan market for cheaper financing.
- Plentiful capital and scarce deals may pressure managers to concede on spreads, leverage or documentation.
Private credit direct lenders are raising record amounts of capital, but deal activity has slowed, and borrowers are increasingly returning to the syndicated loan market. This divergence is creating pressure to deploy capital into a shrinking pool of attractive opportunities.
Direct-lending funds raised $129.15 billion in the first nine months of 2026, a 35% increase from the previous year and the highest nine-month total on record since 2016, according to Preqin data. However, estimated third-quarter lending volume fell 28% year-on-year to $49.77 billion, according to PitchBook/LCD.
This fundraising-deployment mismatch is increasing pressure to put money to work, according to Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. She noted that the scarcity of attractively priced deals is compounded by competition from the syndicated market. The trend of loans migrating from the syndicated market to direct lending reversed this year, with $16.39 billion of direct-lending loans refinanced in the syndicated market in the third quarter, compared to $2.60 billion of syndicated loans moving into direct lending.