Private Credit Pulse – Q1 2026

Welcome to the Q1 2026 edition of the Private Credit Pulse, DLA Piper’s quarterly newsletter offering strategic perspectives on developments shaping the private credit and fund finance markets.

On March 11, 2026, we hosted our inaugural Private Credit Academy in New York. The event featured a full-day, deal-driven training program that brought together junior- to mid-level professionals to deepen their understanding of the private credit market and sharpen their technical skills across the full deal lifecycle. Recordings are now available.

In this issue, we also share key takeaways from the Fund Finance Association’s 15th Annual Global Fund Finance Symposium; insights on maintaining perfected security interests under the Uniform Commercial Code (UCC) and navigating credit party structures in cross-border financings; a co-authored Bloomberg Law piece on preparing for liability management transactions in private credit; contributions on how technology and artificial intelligence (AI) are transforming the asset class; podcast discussions on private credit in the age of AI and the convergence of private credit with the technology sector; and an appearance on LSEG LPC’s Lending Lowdown podcast on net asset value (NAV) loans as a core general partner (GP) financing tool.

Looking ahead: In our next newsletter, we will recap our Beyond the Balance Sheet: The Future of Private Credit and Fund Finance Summit.

Market updates at a glance

• Global private credit AUM hits $3.5 trillion: The market reached $3.5 trillion in assets under management (AUM), with capital deployment of $592.8 billion in 2024 – an increase of 78 percent from 2023 volumes.
  
  
• Three themes dominated Q4 2025 activity among the biggest managers:
  • 1) Insurance: Deepening life insurer balance sheet partnerships for permanent, low-cost capital
  • 2) Retail wealth: Building non-traded Business Development Companies, interval funds, and European Long-Term Investment Fund platforms for defined-contribution and high-net-worth markets
  • 3) Digital infrastructure: Deploying capital at scale into data centers, AI compute, and energy transition assets
    
    
• Full-year 2025 direct lending: $247 billion, marking the second-busiest year on record: Direct lending transaction volume totaled $247 billion in 2025, down 11 percent year-over-year, but still the second-busiest year since PitchBook LCD began tracking. PitchBook LCD tracked 842 transactions – down 16 percent from 2024 – indicating a possible shift toward larger individual deal sizes.
  
  
• Nearly one-third of US insurer assets now allocated to private credit: Almost $2 trillion of the $6 trillion in US insurers’ invested assets is deployed across private credit sub-asset classes, driving demand for rated structures, collateralized fund obligations (CFOs), and rated note feeders.
  
  
• CFO and rated note feeder issuance reached a record $26.2 billion in 2025: Kroll Bond Rating Agency (KBRA) reported more than 20 CFO transactions in a record year, as rated structures become mainstream pathways for insurance and fixed-income investor access to private capital. KBRA projects continued rapid growth in 2026.
  
  
• US subscription line volume rose more than 15 percent in 2025, with more than $22 billion in new committed facilities: More than $22 billion in new facilities closed across more than 50 lenders and 120 fund managers. Subscription lines represented approximately 68 percent of all new US fund finance deals.
  
  
• Asset-based finance is now larger than all other private credit markets combined: Structural tailwinds, including bank retrenchment, insurance demand for rated assets, and AI and data center financing needs, may accelerate growth in 2026.
  
  
• Private credit firms increase CLO issuance: Amid redemption pressures, private credit firms are issuing collateralized loan obligations (CLOs) at a near-record pace, with $9.5 billion in Q1 2026, just shy of 2024's record first quarter. 

Our latest insights

• Financial futures: Leading through disruption. DLA Piper's 2026 Financial Futures report surveys nearly 800 financial services decision-makers globally on the forces reshaping the industry.
  
  
• Maintaining perfected security interests under the UCC: Top points for foreign lenders. This DLA Piper alert provides key insights for foreign lenders on keeping UCC security interests perfected beyond initial filing, covering debtor name changes, the 31-day re-filing window, the 2022 UCC Amendments on digital assets, and key state-specific nuances.
  
  
• Prepare for liability management transactions in private credit. As liability management exercises (LMEs), including uptier exchanges, drop-downs, and non-pro rata repurchases, migrate from the syndicated market into private credit, this article offers insights on structuring to address LME risk, covering covenant design, creditor cooperation agreements, and the evolving US and European legal landscape.
  
  
• DLA Piper’s first annual Private Credit Academy: Key takeaways. DLA Piper's inaugural full-day training program covered fund financing tools such as subscription facilities, NAV, back leverage, direct lending versus syndicated loan dynamics, asset-based finance, exercising remedies in downside scenarios, and the growing role of technology and AI in private credit. Access the recording and key takeaways here.
  
  
• The role of NAV loans and how they fit in GPs' financial toolkits. Ryan J. Moreno (New York), DLA Piper Partner and Co-Head of Private Credit and Fund Finance, was featured on LSEG LPC's Lending Lowdown podcast alongside 17Capital's Aryeh Landsberg to discuss NAV loans as a core GP financing tool. The discussion covered use cases from accretive M&A to follow-on investments, typical loan-to-value parameters, and the outlook for continued adoption beyond large-cap buyout funds.
  
  
• Navigating credit party structures in cross-border financings. This alert compares the US and UK credit party frameworks for cross-border private credit transactions, covering borrower structures, guarantor configurations, security packages, and intercreditor mechanics under each regime.
  
  
• 2026 Fund Finance Association Symposium: Key insights. Read our key takeaways from the Fund Finance Association's 15th Annual Global Symposium in Miami, including a sponsor-friendly market with compressed pricing; NAV and hybrid facilities firmly mainstream; CFOs gaining traction; sports emerging as a new fund finance frontier; and regulatory compliance considerations, including Capital Requirements Directive VI and the Comprehensive Outbound Investment National Security Act of 2025.
  
  
• Crossing borders, financing funds: Global perspectives on common fund finance tools. DLA Piper's Fund Finance team contributed to the Global Legal Insights "Fund Finance Laws and Regulations 2026" guide, exploring how subscription lines, NAV facilities, hybrid structures, and rated feeders operate across jurisdictions and the structuring considerations that arise in cross-border deployments.
  
  
• The Asset Class Breakdown – AI in Private Credit. Matt Schwartz (San Diego), DLA Piper Partner, US Finance Chair, and Co-Head of Private Credit, joined HypercoreAI and Armentum Partners for a conversation exploring AI in private credit from legal, operational, and data perspectives – covering where AI is working today, and where structural complexity limits impact.
  
  
• Private Credit Meets the Valley. Matt Schwartz joined Modern Capital: The Private Markets Podcast to discuss the convergence of private credit and the technology sector, including the evolution of tech lending, the underwriting challenges of annual recurring revenue-based loans, and how AI is reshaping software business models and credit risk.
  
  
• Private credit in the age of AI: Lender perspectives. Matt Schwartz joined the Debtwired! podcast to discuss AI's dual role in private credit, both as an emerging credit risk in borrower portfolios and as an operational tool transforming how funds source deals, conduct diligence, and monitor companies.
  
  
• How technology and AI are transforming private credit. DLA Piper's contribution to the Global Legal Insights Private Credit 2026 guide examines how AI and digital tools are impacting deal sourcing, underwriting, portfolio monitoring, and reporting, as well as how market participants can harness these capabilities while managing emerging risks.