Direct lending fundraising stands out within private credit in 2024

Global private credit fundraising dropped almost 21% to $176 billion in 2024, according to data provided by PitchBook. Direct lending was an exception, however. The strategy’s fundraising increased nearly 41% to $119.4 billion while other categories experienced drops ranging from 15% for real estate funds to 83% each for mezzanine and infrastructure debt funds.

Direct lending funds have had the largest share of private credit fundraising going back to at least 2017. However, last year, its share jumped to 68% from 38% in 2023.

Direct lending, although typically relatively conservative since it primarily invests in senior secured loans, had the highest internal rate of return in the second quarter. The strategy’s 12.9% IRR was 340 basis points better than mezzanine debt.

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