Despite recent volatility, private credit remains a dominant force in private markets. According to PitchBook’s 2025 Global Private Market Fundraising Report, LPs committed $234.1 billion across 200 funds last year—the highest capital inflow of any asset class except private equity.

The sector’s resilience is driven by a surge in large-cap “take-private” deals. In the second half of 2025, take-private activity hit $178.6 billion, a 135% increase from the first half. This includes the record-breaking $55 billion acquisition of Electronic Arts, demonstrating that private debt can now finance the largest leveraged buyouts in history.

However, the “SaaS-pocalypse” triggered by AI disruption has bruised the industry. Software loans, which comprise 13% of the market, saw weighted-average bids plummet by 756 basis points in early 2026, the sharpest decline since the COVID-19 pandemic. In contrast, non-software loans fell by a more modest 124 basis points. This divergence has forced major managers like Ares and Apollo to maintain 5% caps on withdrawals to manage a wave of redemption requests.

The current shakeout is viewed not as an existential threat, but as a test of underwriting strength. Experts predict the “losers” will be mid-sized, energy-intensive companies or those lagging in the AI race, while firms with disciplined credit standards will emerge as the long-term winners in a market that has doubled in size over five years.

End Notes

Source: https://pitchbook.com/news/articles/private-credit-is-bruised-not-broken