The Private Credit Market: The Data Behind the Headlines (Squire Patton Boggs)

Summary

• On March 30, 2026, the Department of Labor's Employee Benefits Security Administration published a proposed rule creating a process-based safe harbor for 401(k) and other defined contribution plan fiduciaries selecting alternative assets, including private credit.p.1
• The update covers retail private credit, capital reallocation, second-quarter 2026 results and headlines versus performance data, and finds a market bifurcation rather than a market-wide deterioration.p.1
• Direct lending accounted for 58.4% of all private credit capital raised in 2024, but had fallen to roughly 31% by the first quarter of 2026.p.2
• Credit secondaries fundraising through the first quarter of 2026 had already reached approximately 75% of the amount raised in that strategy during all of 2025.p.2
• Credit-specific assets under management at one large diversified alternative asset manager reached roughly US$331 billion.p.3
• An estimated 80% of the direct lending market sits in structures without on-demand redemption rights.p.4

Key insights

1. Following the redemption wave, managers have started retiring the "semi-liquid" label altogether.p.2
2. Capital is shifting from traditional corporate direct lending toward asset-based and specialty finance strategies backed by tangible or contractual cashflow collateral.p.2
3. The largest diversified platforms report record or near-record fundraising, and the market is described as "K-shaped".p.3
4. The largest publicly traded BDC reported second-quarter net investment income modestly above the prior-year quarter on a per-share basis and maintained its dividend, even as net asset value per share declined modestly.p.3
5. Liquidity-driven stress is concentrated in a definable, retail-facing minority of the market rather than reflecting private credit as a whole.p.4
6. Redemption gates have functioned as designed and agreed in subscription documents and helped prevent a run on financial institutions.p.4
7. The market lacks the harmonized data needed to test either the stress narrative or the resilience narrative with confidence.p.4