By Joanne McEnteggart, Global Head of Debt, Capital Markets and Corporate
The global private credit market enters 2026 with renewed momentum. Structural forces, including ongoing bank balance sheet constraints, tighter regulatory capital requirements and investors’ continued search for risk adjusted yield and diversification, are accelerating the shift towards private lending channels across regions.
Preqin’s latest outlook reinforces this trajectory, projecting private credit assets under management (AUM) to more than double to $4.5 trillion by 2030, with fundraising expected to recover in 2026 following last year’s slowdown. While direct lending remains the backbone of the asset class, capital is increasingly flowing into a broader range of strategies, including distressed debt, special situation strategies, and asset-backed finance, alongside the continued growth of semi-liquid structures and evergreen structures. As a result, private credit is becoming more accessible to a broader investor base beyond traditional institutional investors.
This article explores the trends expected to shape global private credit markets in 2026.
Diversification and a widening investor base
Private credit portfolios are becoming more diversified as managers respond to evolving investor demand and a broader opportunity set. Asset-backed lending is proving especially popular, particularly as the construction of data centres accelerate to support the surge in AI-related investment. The five major hyperscalers alone have announced more than $1.5 trillion in capital expenditure spending over the next five years, driving demand for flexible, long-dated financing solutions that private credit is well-positioned to provide.
Additionally, capital is flowing into a wider range of credit strategies. Collateralised loan obligations (CLOs) have allowed general partners (GPs) to meet rising demand for liquid credit exposure, while granting access to retail and wealth management channels. Preqin forecasts a near 28% annualised surge in distressed debt fundraising by 2030, while mezzanine and special situations fundraising strategies are expected to grow by around an annualised 10% over the same period.
Dealmaking momentum rebuilds
The market heading into 2026 anticipates an acceleration in dealmaking after 2025 finished on a bullish note following several years of sluggish M&A volumes. Falling borrowing costs and increased AI sector activity are set to further propel dealmaking.
According to Goldman Sachs, private markets will be at the epicentre of dealmaking in 2026, with private credit set to capitalise on restrictions of traditional lenders by offering tailored solutions, and more flexible maturity and repayment terms.
This will drive opportunities to deploy a full range of credit strategies across the board and provide limited partners (LPs) with tailored deal access. The value of private capital deals hit $2.3 trillion as of 30 November 2025, the best year since 2021, according to data from Preqin. Indeed, transactions of $10 billion or more in a calendar year hit a record high.
Investor appetite for credit to remain strong
Despite a number of high-profile corporate defaults, the majority of private credit investors remain satisfied with their exposure to this asset class – 18% of LPs in Preqin’s November 2025 survey stated that private credit exceeded their expectations and 73% stated that the asset class met their expectations. 81% of survey respondents plan to hold or increase their commitment to private credit throughout 2026, with this figure rising to 89% over the longer term.
Expected wave of refinancing
A large volume of corporate bonds issued during the low-interest period of 2020-21 is approaching maturity, suggesting that a cycle of refinancing is set to begin. According to McKinsey & Co, more than $620 billion in high-yield bonds and leveraged loans are set to approach maturity in 2026 to 2027, which could create refinancing opportunities and spur greater demand for private credit solutions. Amid a higher interest rate environment, the speed and flexibility of private debt provide an advantage over other credit channels. However, this comes with risk, as higher borrowing costs presage a higher risk of default, and accordingly, prudent and effective risk management will continue to be pivotal.
Potential changes in regulatory momentum
Regulatory momentum is shifting. The U.S. Securities and Exchange Commission has been leading the charge globally, pushing for greater access to private markets for retail investors. Such moves signal an increased recognition of the role private markets play in a well-balanced investment portfolio. Broader access to private wealth markets through wealth channels is expected to increase capital inflows into private credit. This will put greater focus on careful deployment of capital while maintaining underwriting standards.
At the same time, regulators are increasing scrutiny of the private credit space, especially around lending exposure and systemic risks. These two trends will likely continue in tandem, adding to compliance workloads.
Securitisation reforms
The European Union (EU) is working to revive its securitisation market, with proposed regulatory changes expected to gain traction in 2026. The effort comes as the EU continues to lag significantly behind the U.S., where more than $2 trillion in securitised products were issued in 2024 compared to just €245 billion in Europe.
Proposed EU measures aim to simplify burdensome requirements and reduce costs to encourage greater securitisation activity. This will enable financial institutions to develop new product ranges tied to securitised assets while transferring balance sheet risk to free up more capital for investment. These developments are likely to create significant opportunities for private credit managers.
Impact of evergreen and semi liquid structures
Evergreen and semi-liquid funds will become an increasingly important component of both institutional and retail investor portfolios thanks to a more permissive regulatory environment toward retail flows into illiquid assets, and LP demand for greater liquidity. Preqin expects semi-liquid and evergreen funds to account for around $1.4 trillion of the estimated $4.5 trillion in private credit AUM by 2030.
Investor surveys continue to show satisfaction with these structures’ reliable income streams and enhanced liquidity features, suggesting appetite for evergreen and semi-liquid funds is holding firm.
Navigating the evolving private credit landscape
Private credit is entering a more mature phase of development. As the asset class continues to scale, attention is shifting from growth alone to how capital is structured, deployed and managed over time. In this environment, discipline, adaptability and operational strength will play an increasingly important role for both managers and investors.
As private credit becomes a defining force in the alternative investment universe, you need the right supporting partner to fully realise emerging opportunities. At IQ-EQ, our Global Private Debt and Credit Desk team has an unrivalled combination of experience, global reach and technology at our fingertips. Get in touch today.
