PitchBook has indicated that the US private credit sector is experiencing a considerable expansion in early 2026, poised to exceed $2 trillion in total assets under management, according to recent projections from Moody’s. PitchBook has explained that this growth is bolstered by a steady decline in default rates, signaling improved borrower stability and investor confidence.
PitchBook added in the research report that the current middle market has demonstrated notable resilience, with fourth-quarter 2025 earnings climbing 3.1% as tracked by the Golub Capital Altman Index, primarily fueled by strong performances in consumer goods and technology industries.
These developments underscore a vibrant landscape where leveraged finance activities, including loans and recapitalizations, continue to thrive amid evolving economic conditions.
One standout trend is the surge in dividend recapitalizations within the syndicated loan space.
In 2025, these transactions hit an all-time high of $74 billion, highlighting private equity sponsors’ eagerness to extract value from their portfolios.
A prime example is Ensemble RCM’s recent $4.4 billion syndicated loan, which facilitated a substantial dividend payout to its backers.
This activity reflects broader momentum in leveraged loans, which reached a record $1.55 trillion in outstanding volume by the end of 2025, even as floating-rate investments faced some headwinds.
Fundraising has also been steady, with major players like Churchill amassing over $16 billion for its senior lending initiatives and Ares closing a $7.1 billion credit secondaries fund—far surpassing its initial $2 billion goal through significant limited partner commitments.
Notable transactions further illustrate the sector’s dynamism. The Hologic leveraged buyout involved a large-scale syndicated loan that pushed boundaries on credit pricing, while QXO expanded its preferred equity offering to $3 billion due to overwhelming investor interest.
On a more challenging note, Saks Global entered Chapter 11 bankruptcy with $1.75 billion in debtor-in-possession and exit financing arranged.
Strategic partnerships are emerging as well, such as Ares’ joint venture with Goal Investment Management for consumer loan acquisitions and Blackstone’s $1 billion collaboration with WLFC to bolster aircraft leasing through asset-based financing.
Looking at broader trends, capital inflows into private credit are diversifying, with new entrants like Macquarie aiming for $1 billion in its inaugural US direct lending vehicle.
Leveraged buyouts and recaps remain key drivers, intensifying competition between private credit providers and syndicated markets.
In the middle market, earnings stability persists despite occasional mega-bankruptcies inflating default volumes in dollars, though rates themselves are easing.
European influences, including tighter spreads and hiring expansions, could indirectly shape US dynamics by fostering cross-border collaborations.
Analysts observe that while risk premiums in related areas like European loans are compressing due to lower interest rates, the US private credit arena benefits from reduced defaults and unprecedented capital outflows.
The push toward a $2 trillion milestone is propelled by specialized funds and sustained LBO activity, carrying forward 2025’s positive inertia into the new year.
However, the research report also noted that the ongoing challenges with floating-rate assets and economic uncertainties warrant cautious optimism.
PitchBook pointed out that overall, the middle market’s earnings uptick points to underlying strength, positioning private credit as a resilient asset class for investors navigating a maturing credit cycle.
PitchBook concluded that as deal flow accelerates with supportive policies and liquidity, the sector appears set for continued evolution, emphasizing selectivity and strong underwriting to mitigate risks.