Private credit fundraising hits record $129bn despite 28% decline in lending

Direct lending funds raised a record $129.15bn during the first nine months of 2026, a 35% increase year on year and the highest nine-month figure recorded by Preqin since its data series began in 2016, according to a Reuters report. The fundraising strength contrasts sharply with lending activity. PitchBook/LCD estimates direct lending volumes declined 28% year on year during the third quarter to $49.77bn, widening the gap between capital raised and new lending opportunities.

The imbalance is placing growing pressure on private credit managers to deploy capital. The article notes this could lead to greater competition over loan pricing, leverage levels and covenant protections, a development that bears directly on underwriting discipline across the sector.

Sunaina Sinha Haldea, global head of private capital advisory at Raymond James, attributed the divergence to a cyclical shortage of attractively priced transactions and increased competition from syndicated loan markets, rather than a structural decline in borrower demand. Refinancing data supports this view of a shift in market share. In the third quarter, approximately $16.39bn of direct lending loans were refinanced through broadly syndicated markets, compared with $2.60bn of syndicated loans moving into direct lending. This reverses the pattern seen in 2022 and 2023, when volatile public lending markets pushed borrowers toward private credit managers offering flexibility and execution certainty.

The trend could leave private credit portfolios with a greater share of borrowers unable to access syndicated financing, although smaller companies may continue to favour direct lenders because of their specific funding requirements. The gap between fundraising and deployment raises a open question for allocators: whether managers will maintain underwriting standards or accept lower returns to put accumulated capital to work.