Private capital in 2026: Foundations for a changing market

Key Considerations for 2026

• Seize the constructive backdrop – with discipline: Lower interest rates and rising M&A may support greater deal activity, but a focus on quality assets, disciplined underwriting and resilient business models remain important to mitigate potential risks.
• Avoid the crowd: U.S. traditional middle market lending – particularly in sponsor-backed deals – has seen evolving participation trends in recent years, offering the potential for modest leverage, compelling yields, and an attractive diversification opportunity for investors looking to complete their private credit exposure.
• Value full-spectrum capabilities: Faced with unpredictable conditions, we believe sponsors will increasingly seek trusted capital partners who consistently provide flexibility, a full range of creative solutions and certainty of execution, regardless of the macro backdrop.
• Navigate accelerating manager differentiation: Relative performance will come into sharper focus as returns diverge further, leading to increased bifurcation in an increasingly discerning fundraising market.