The evolving landscape of private credit
Clear strategy, disciplined underwriting and a focus on returnability will be key as opportunities emerge for specialised, well-positioned teams.
Broader LP focus and shifting strategy mix
Private credit continues to expand in both scale and sophistication. LPs are increasingly looking beyond traditional direct lending toward asset-backed finance, secondaries, and opportunistic or distressed strategies. While optimism about 2026 remains strong, the more notable trend is the steady diversification of capital and the widening range of solutions investors are prioritising.
Market momentum and the evolution of private credit
The market is clearly evolving. Asset-backed finance is gaining real traction as investors seek differentiated exposure beyond cash-flow lending. At the same time, diligence standards are rising, with greater emphasis on operational rigour, portfolio oversight, and technology-driven processes. With the US setting the pace and Europe progressing more gradually, private credit is positioned for sustained global growth.
The rise of retail capital and larger platforms
A significant theme is the increasing flow of retail capital into private credit. More individual investors are seeking yield and stability, prompting managers to innovate in product design and distribution. Large platforms continue to consolidate market share, demonstrating clear advantages in sourcing, structuring, and supporting portfolio companies at scale.
Direct lending, distressed and opportunistic credit
Despite a more uncertain macro backdrop, managers remain constructive on future deal flow. A substantial backlog of private-equity-owned companies is expected to support renewed activity as conditions stabilise. However, volatility is likely to persist, placing a higher priority on disciplined underwriting, resilient portfolio construction, and enhanced technology-enabled monitoring.
As the credit cycle progresses, distressed and opportunistic strategies are becoming increasingly attractive. Tightening financial conditions and sector-specific pressures, particularly in consumer-linked industries, are creating compelling entry points, including opportunities tied to CLO dislocations and discounted secondary positions.
As the credit cycle progresses, distressed and opportunistic strategies are becoming increasingly attractive. Tightening financial conditions and sector-specific pressures, particularly in consumer-linked industries, are creating compelling entry points, including opportunities tied to CLO dislocations and discounted secondary positions.
Credit secondaries and rising fundraising expectations
Credit secondaries are gaining meaningful momentum, and the market is expected to double as LPs seek diversified exposure, faster deployment, and more attractive entry pricing. GP-led solutions are becoming mainstream as managers look for ways to provide liquidity while maintaining alignment, making secondaries a core component of portfolio construction.
Fundraising expectations, meanwhile, are higher than ever. LPs are more analytical and selective, requiring managers to articulate a clear strategy, disciplined process, and measurable edge. The growing emphasis on DPI reflects how central capital returnability has become to investment decision-making.
Fundraising expectations, meanwhile, are higher than ever. LPs are more analytical and selective, requiring managers to articulate a clear strategy, disciplined process, and measurable edge. The growing emphasis on DPI reflects how central capital returnability has become to investment decision-making.
Final thoughts
Private credit is entering a more diversified and competitive phase, marked by broader LP preferences, rising operational expectations and expanding strategy mixes. Retail inflows, larger platforms and technology are reshaping how managers scale, while volatility is creating openings across distressed, opportunistic and secondary markets.
In this environment, success will hinge on clarity of strategy, disciplined underwriting and a focus on returnability. Well-positioned teams with specialised capabilities are likely to be the ones who capture the most meaningful opportunities ahead.
In this environment, success will hinge on clarity of strategy, disciplined underwriting and a focus on returnability. Well-positioned teams with specialised capabilities are likely to be the ones who capture the most meaningful opportunities ahead.
Click below to read Oliver's profile and find his contact details.
Oliver's profile
