• Global private credit AUM grew by 17% last year, reflecting persistent demand from borrowers and investors across an increasingly diverse range of lending strategies. 
• Credit quality of loan portfolios remains broadly stable, with signs of stress concentrated in certain market segments
• Use of fund-level leverage remains modest, with 41% of flagship corporate lending funds surveyed operate without investment leverage.

New industry research from the Alternative Credit Council (ACC), the private credit affiliate of the Alternative Investment Management Association (AIMA), finds that the global private credit market reached US$4.1 trillion in assets under management (AUM) at the end of 2025, increasing by 17% for the second year in a row. 

Financing the Economy 2026, published in partnership with Houlihan Lokey, finds that the continued expansion of private credit is underpinned by strong investor demand, competitive returns and durable loan portfolios.

The report highlights several indicators of the market's continued growth and resilience, including:  

• Institutional investor demand remains robust throughout 2026 resulting in likely continued expansion and a record fundraising year: Private credit fundraising in the first half of 2026 reached its highest level for five years, contrasting with elevated redemption requests in some semi-liquid vehicles during the same period.  

• AI has become a major investment theme for private credit: Investment in AI-related businesses increased substantially during 2025 and 2026 with private credit being a key source of AI infrastructure funding. Lenders continue to focus on the potential impact of AI-driven disruption into their underwriting due diligence, while adopting various strategies to mitigate risk. 

The research also reveals that the underlying fundamentals of private credit funds and their loan portfolios remain broadly stable, such as:   

• Fund-level leverage, an important financial stability metric, remains modest and broadly unchanged from data reported over the past decade: 41% of flagship corporate lending funds surveyed operate without investment leverage. Private credit funds use an estimated US$399 billion of borrowing in aggregate, equal to roughly 25% of their net AUM. 

• Respondents demonstrate resilient fund structures: Most private credit capital remains held in vehicles without investor redemption rights. Liquidity management tools such as gates or redemption restrictions have enabled managers of funds offering liquidity to manage elevated redemption requests in an orderly manner.  

• Credit quality of loan portfolios remains broadly stable, with signs of stress concentrated in certain market segments: Interest coverage, loan-to-value ratios and non-accrual rates point to broadly stable or improving credit quality across most respondents. However, weaker results across these same metrics highlight pockets of deterioration and differences in credit performance across portfolios.  

Jiří Król, Global Head of the Alternative Credit Council, said: 

"Private credit is growing, and it’s growing for the right reasons. The market is bigger, but more importantly it’s broader: more strategies, more kinds of borrower, more ways for capital to reach the real economy. Investors keep coming back for more because returns have delivered. Key financial stability indicators across leverage, liquidity and credit quality look much as they have for a decade and do not point to a pronounced increase in risk.

Any fast-growing market will have its difficult moments, and private credit is no exception. But nothing we’re seeing at the industry level suggests things are being knocked off course, with plenty of room for growth."  

Dr. Cindy Ma, Global Head of Portfolio Valuation and Fund Advisory Services at Houlihan Lokey, said: 

“Private credit has moved from the periphery of the financing markets to the core of how the economy is financed, a long way from the niche asset class it was just a few decades ago. At more than US$4 trillion, private credit now supports a broad range of borrowers, from mid-market companies to the infrastructure powering artificial intelligence, and it often provides the flexible, long-term capital that innovative businesses can’t find efficiently or quickly elsewhere. As the asset class grows in scale and importance, independent and rigorous valuation matters more than ever. Investors need confidence that these assets are fairly marked, and that confidence is what will allow private credit to keep financing growth and innovation for years to come.”

Methodology

The twelfth edition of Financing the Economy, produced in partnership with Houlihan Lokey, draws on survey data from 41 private credit managers reporting approximately US$2.4 trillion in total private credit capital, alongside interviews with 15 leading industry participants and additional market data. 

Press contacts: 

Drew Nicol, Director, Research and Communications: [email protected]

John Gallagher, Head of Communications, Houlihan Lokey: [email protected]