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Industry study 08 of 22 · Private Equity Research Companion

Private Credit and Direct Lending

~7,000 words · 3 technical exhibits

In one line: Private credit is non-bank lending by funds, BDCs and insurance balance sheets, negotiated directly with borrowers and held to maturity rather than syndicated. It grew from a post-GFC niche into a ~$1.7–2tn+ asset class (~, reported industry estimates). It now competes head-on with the leveraged-loan and high-yield markets and is the main financing source for middle-market LBOs.

What the study covers

  1. 1Overview
  2. 2How it works
  3. 3Economics and key numbers
  4. 4Key players and landmark deals
  5. 5Risks and pitfalls
  6. 6How an expert thinks about it
  7. 7Glossary
  8. 8Related sections

Technical exhibits

Worked examples, checklists and case studies included with this study.

Unitranche vs Syndicated Comparison

Unitranche vs. broadly syndicated loans vs. 1L/2L: pricing, terms, certainty, cost

Worked Example Direct Lending Loan Economics

SOFR + spread, floor, OID, call protection, yield-to-3-year, prepayment scenarios, lender return stack

Bdcs Nav Lending and Asset Based Finance Primer

BDC mechanics and ROE math, NAV lending to PE funds, asset-based finance, insurance-led credit