Key takeaways from the 2025 Private Credit Connect: East conference

The 2025 Private Credit Connect: East conference brought together key players from across the private credit landscape – including investors, banks, non-bank lenders, and service providers – for an opportunity to network and discuss market trends.

Below, DLA Piper’s United States Finance team provides takeaways from the event.

Market dynamics and capital deployment trends

Banks are becoming increasingly selective in their capital deployment, prioritizing diversification and stability across large portfolios. Despite signs of consumer softening, overall gross domestic product (GDP) growth remains robust, supporting continued expansion of earnings before interest, taxes, depreciation, and amortization (EBITDA) within the middle market. Participants highlighted a shift toward more prudent underwriting and a disciplined approach to lending, with institutions actively redeploying capital within existing borrower relationships. There is also a growing role for private credit in filling financing gaps that public markets are unable or unwilling to serve, underscoring the sector’s importance in supporting scaled development amid evolving macroeconomic and trade dynamics.

A growing ABF market

Asset-based finance (ABF) has firmly entered the mainstream with steady deal flow and pricing resiliency, despite the US administration change and broader market fluctuation. Asset managers noted that graphics processing unit (GPU) and artificial intelligence (AI) infrastructure spend is a key tailwind, widening the pipeline of eligible assets (eg, data center equipment, compute contracts, and recurring revenue receivables). The same forces, however, are elevating complexity and risk. Sponsors stressed disciplined, key performance indicator (KPI)-anchored underwriting and structure over headline technology narratives: focus on cash flow durability, collateral performance data, and unit economics.

Increased innovation

Advances in technology can facilitate more efficient transaction execution. One underwriter specifically highlighted innovation in the review and standardization of loan- and asset-level data, which can reduce diligence friction and cycle time. This underwriter also highlighted improvements in spreading, which can sharpen visibility into underlying assets – accelerating risk assessment and enhancing consistency in underwriting and surveillance.

Resilience and evolution

There continues to be broadening and maturing of the middle market direct lending landscape, highlighting the asset class’s resilience and its ability to perform through market cycles. Direct lenders with scale are increasingly able to manage stress and address potential issues earlier in the credit lifecycle, leveraging deep sponsor and borrower relationships. Constant communication and a “one-stop shop” model enable faster problem-solving and stronger borrower engagement compared to syndicated markets. The alignment of interests among lenders and sponsors, combined with ample US liquidity, has created both opportunity and competition within the space.

Conclusion

The event highlighted the evolving dynamics of capital deployment and the resilience of the private credit market. Banks and non-bank lenders are adopting more selective, disciplined approaches – leveraging deep relationships and technology to manage risk, support growth, and address borrower needs efficiently.

For more information, please contact the authors.