Have critics focused on the wrong credit boom?
Fundraisings from Slate
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📕 Reads of the Week
Market Updates
Have critics focused on the wrong credit boom?
FINRA margin debt reached $1.4 trillion in May 2026, up 54% YoY and more than double since January 2022.
Leveraged ETFs also continue to grow, with U.S. leveraged ETFs having more than quadrupled since 2022.
Explosion in Stock Market Leverage
👉 Carlyle: Have critics focused on the wrong credit boom?
👉 Pimco: Leverage in the system is rising
Speaking of leverage, Mike Brock posted a great piece on the downfall of Leopold Aschenbrenner’s Situational Awareness fund
👉 The downfall of Situational Awareness
Have Bonds stopped working as a shock absorber?
In the Global Financial Crisis, equities fell 57%, and bonds fell 13%. In the COVID crash, equities fell 34%, and bonds fell 15%. Bonds have historically absorbed equity market shocks.
In 2022, equities fell 25%, and bonds fell 24%. The diversification that underpinned 40 years of portfolio construction broke down completely.
👉 Carlyle: Rethinking Fixed Income’s Anchor
Asian private credit fundraising falls to 12-year low
Fundraising by Asian managers has fallen to its lowest level in more than a decade. Only five private credit funds based in Asia closed during the first half of 2026, raising a combined $1.2bn. That compares with 29 funds raising $9.5bn in 2025 and 53 funds securing $20.2bn in 2022.
If the pace of fundraising continues through the second half of the year, 2026 would be the weakest year for Asian private credit fundraising in at least 12 years.
Proskauer’s Private Credit Default Index Falls to 2.51%
In companies with EBITDA of less than $25 million, Proskauer observed a modest decrease from 2.3% in Q1 2026 to 1.9% in Q2 2026.
For those with EBITDA of $25 million to $49.9 million, Proskauer observed a modest increase from 3.1% in Q1 2026 to 3.4% in Q2 2026.
Companies with EBITDA equal to or greater than $50 million decreased to 2.4% in Q2 2026 from 3.0% in Q1 2026.
Manager & LP Updates
Ares explores €3bn secondary sale in its European direct lending fund
The sale relates to €3bn of LP interests in its Ares Capital Europe IV direct lending strategy. If completed, it would rank among the largest private credit secondaries deals completed to date. Talks remain ongoing and may not result in a transaction.
Ares has been an active participant in the sector from both the buyer and seller perspectives. Earlier this year, the firm completed fundraising for its inaugural private credit secondaries strategy, securing $7.1bn of commitments.
HSBC sells $25 billion Australian home and personal loan portfolio to Blackstone
The deal announced by the two companies on Friday is reportedly the world’s largest-ever home loan portfolio transaction. The portfolio will be held across the Blackstone Credit and Insurance, Tactical Opportunities and Real Estate Debt Strategies funds
Partnership Updates
PGIM acquires full ownership of Deerpath Capital
PGIM has agreed to acquire the remaining 25% interest in Deerpath Capital, bringing the firm’s ownership to 100%. The acquisition will strengthen PGIM’s direct lending platform by adding Deerpath’s lower middle market capability to PGIM’s existing core middle market and large cap capabilities. The combined businesses will have $16bn in AUM across a team of 55 investment professionals.
T. Rowe Price and Goldman Sachs Asset Management launch a Private Markets Interval Fund.
The new interval fund combines T. Rowe’s private equity with GSAM’s alternatives platform and private credit expertise of Oak Hill Advisors, the private credit platform of T. Rowe Price.
T. Rowe Price and GSAM intend to deliver a range of public-private investment solutions over the coming years
3 Insights on 2Q Earnings
Managers have begun releasing their 2Q earnings. Here are a few early takeaways, with more to come as Apollo, Brookfield, Oaktree, and Carlyle report this week.
Ares Grew Its Credit Book Nearly Twice as Fast as Blue Owl
The four managers grew their credit AUM by nearly $200 bn over the last year.
At its current pace, Ares would add more credit AUM over the next two years than Blue Owl manages today.
Ares Deployed Nearly As Much as KKR, Blackstone, and Blue Owl Combined
Ares’ deployment primarily consisted of $12.4bn in U.S. direct lending, $4.4bn in alternative credit, and $4.2bn in European direct lending.
Blue Owl’s direct lending deployment declined nearly 70% compared to 2Q last year.
Direct Lending Is Losing Share, Not Volume
Direct lending still raised more capital than any other credit strategy at both Blackstone and Ares this quarter. Blackstone raised $13.3bn for global direct lending, and Ares raised $12.3bn across its US and European strategies.
Blue Owl shows this trend most clearly: Direct lending has nearly tripled in dollar terms since 2021 and has still lost six percentage points of AUM share.
💰Fundraising News
Slate’s $1 billion Senior Lending SMA
Slate Property Group, a New York manager, closed a $1 billion SMA to expand its senior lending platform. The fund will originate lower-leverage senior secured residential construction and bridge loans through the vehicle, running alongside its SCALE Lending strategy. The SMA targets loans from $40 million to $200 million, priced 300-400 basis points over SOFR, filling a gap below Slate's traditional 500-650 basis point platform.
This newsletter is for educational and entertainment purposes only. It should not be taken as investment advice.