US private credit funds raised significant capital in the second quarter. Direct lending activity, however, saw a sharp decline during the same period. This divergence highlights investor capital outpacing available new lending opportunities. Private equity-backed lending experienced the most substantial decrease in deal volume. Investors now prioritize underwriting discipline and risk-adjusted returns over deployment speed.

US direct lending nears a three-year low even as private credit firms raise record funds, creating a growing gap between available capital and deal flow.

US private credit funds raised significant capital in the second quarter. Direct lending activity, however, saw a sharp decline during the same period. This divergence highlights…