10 November 2025 • 5 minute read

Private Credit Pulse – Q3 2025

Key legal developments and actionable insights from our industry-ranked team

Welcome to the Q3 edition of the Private Credit Pulse, DLA Piper’s quarterly newsletter offering strategic perspectives on developments shaping the private credit and fund finance markets.

In this issue, we take a closer look at the latest structural innovations, including the parallels between rated feeder funds and structured finance products; offer practical guidance on cross-border creation and perfection of security interests; and highlight new approaches to collateral and liquidity management.

We also examine evolving attitudes in the fund finance space in our Private Funds CFO keynote interview, published by PEI Group, and share key takeaways from the 2025 Private Credit Connect: East conference and the European Fund Finance Symposium.

Lastly, we take a deep dive into how technology and artificial intelligence are transforming private credit in our recent contribution to Global Legal Insights – Private Credit 2026, exploring how digital tools are reshaping deal sourcing, diligence, documentation, and risk management.

Market updates at a glance

Middle-market CLO issuance accelerates: Q3 issuance hit $13.7 billion across 24 transactions, with middle-market collateralized loan obligations (CLOs) accounting for 40 percent of new deal volume between mid-August and mid-September.
Policy shift opens retirement plans to private credit: A recent Executive Order directed regulators to revise Employee Retirement Income Security Act (ERISA) guidance, enabling 401(k) and other defined-contribution plans to include alternative assets such as private credit.
Buyout activity rebounds: Global private-equity/venture-capital deal values reached $258.5 billion in Q3 (July–September). This was a 42.6-percent increase year over year, signaling a healthier pipeline for direct lenders even as some sponsors revisited syndicated options.
Affluent investors fuel private credit: United States high-net-worth investors injected $48 billion into private-credit funds in the first half of 2025, surpassing the full-year 2023 total and underscoring strong demand for private credit structures.
Secondaries gain traction: By the end of Q3, secondaries represented approximately 16 percent of total private debt fundraising. Up from 1–4 percent in prior years, this increase highlights a growing demand for liquidity and portfolio recycling.
Strategic platform consolidation accelerates: Q3 saw a surge in consolidation across private credit and private markets, highlighted by Brookfield Corporation’s acquisition stake in Oaktree Capital Management, Manulife’s majority stake in Comvest Credit Partners, Blackstone’s partnership with L&G, and NXT Capital’s collaboration with Cresset Partners.
Specialty credit fundraising: The first half of 2025 saw approximately $124 billion in private credit fundraising, with more than 50 percent of new funds focused on opportunistic credit and specialty finance – highlighting a significant shift toward niche strategies.
Investor demand fuels sector diversification in private credit: Despite spread compression, appetite for specialty and asset-based private credit remains strong, pushing managers into structured finance, net asset value (NAV) loans, and non-traditional assets. Examples include Castlelake’s $2.3 billion fund, Angelo Gordon’s $1 billion fund, and PIMCO’s $3.5+ billion strategy.