The State of Private Credit in Q325
Credit Crunch's Q3 Recap
š Hey, Nick here. A big welcome to the new subscribers at Allianz, GIB Asset Management, and Prudential. This is the 135th edition of my weekly newsletter. Each week, I write about private credit insights and fundraising announcements. You can read my previous articles here and subscribe here.
š 2025 Fundraising Recap
With Q3 behind us, here are my top insights for the year so far. This recap isnāt exhaustive, but itās enough to keep you ahead of 99% of your peers.
Key stats š
Number of fundraising announcements covered: 69 (Up 18% YoY)
Amount raised: $95 billion (Up 5% YoY)
Number of fund managers covered: 65 (Up 18% YoY)
Number of Countries where funds were based: 14 (Unchanged YoY)
Scroll down to the bottom if youāre here for my Funds of the Quarter.
Private Credit Fundraising Returns to Growth
Q3 saw a return to growth, following a weaker Q2.
In total $95 billion was raised, up 5% compared to last year and over 20% higher than Q2.
Private credit fundraising is up 10% YTD, with nearly $300 billion raised this year already.
North America Fights Back š
šŗšø While American funds grew this quarter, YTD fundraising is still significantly lower compared to last year. The decline was nearly entirely driven by the weak Direct Lending fundraising, which is still less than half of 2024ās number.
See Marblegateās Whitepaper on the US Middle Market (Link).
European funds continue to benefit from tailwinds, with the median fund nearly 2x the size compared to 2023.
See Brookfieldās and Apolloās comments on Europe.
šNickās Top Articles of the Quarter
3 Reasons Aresā Latest In the Gaps Is Required Reading for Your Credit Team
Inside Q2 2025: What the Biggest Alternative Managers Are Talking About
Why Apollo Thinks Europe is the Key to Private Creditās Growth
Is Direct Lending Overcrowded?
Opportunity fundraising outperformed in Q3.
Collerās $7 billion fund was the clear outlier.
ABL has grown rapidly.
Ares suggested, at this point, everybody and their cat is raising an ABL fund.
The Five Largest Funds Raised a Third of the Capitalā¦
Goldman Sachsā $6 billion Evergreen European Private Credit Strategy.
H.I.G. WhiteHorseās $5.9 billion Middle Market Lending Fund IV.
The $10B Club is Getting Smaller
Large funds (>$1 billion) raised the bulk of capital.
For the first time in 12 quarters, no fund raised more than >$10 billion.
The average fund size also declined 20% YoY to $1.5 billion.
š Nickās Funds of the Quarter
Proof that private credit is more than senior and āspecial sits.ā
š Mad Capitalās $78.4 million Agriculture Fund
Mad Capital is a Colorado-based agriculture lender. The second fund will finance U.S. farmers to help them adopt regenerative organic practices while boosting long-term profitability.
š» Claret Capitalās Second Close of its European Growth IV Fund.
I may be biased, but Iām incredibly proud of this one. We announced the second close of Claret Capitalās fourth fund. The close takes our AUM to over $1 billion, reinforcing our position as a leader within the European technology and life science growth lending.
š« Castlelakeās $1.8 billion aviation lending entity, Merit AirFinance.
Proof that Castlelakeās thesis for being acquired is panning out.
We feel like we are the dog who caught the bus, but the bus is moving at 40 miles an hour.
If we are going to ride this wave of quickly scaling, we needed to step into a different league.
We needed a partner who was going to open doors and provide multiple different types of capital.
Isaiah Toback, Partner, Deputy Co-Chief Investment Officer, Castlelake
This newsletter is for educational or entertainment purposes only. It should not be taken as investment advice.
I gotta check all your quarterly recaps going back. This is awesome!