US private credit lending falls 55% in Q2 as fundraising hits two‑year high

Direct lending by U.S. private‑credit funds collapsed in the second quarter of 2024, with loan volume dropping about 55% quarter‑on‑quarter to $33.59 billion – the lowest level since Q2 2023 – and the number of deals falling to 154 from 217. At the same time, North America‑focused closed‑end direct‑lending funds raised $16.25 billion in the quarter, the strongest fundraising result in two years.

The divergence reflects softer merger‑and‑acquisition activity, borrower delays and stronger competition from the syndicated loan market, as well as higher interest rates that have strained loans originated in the 2021‑22 boom. Private‑equity‑backed lending was hit hardest, with PE‑backed volume halving to $19.40 billion and LBO‑related volume falling to $9.79 billion. Industry executives, including EY’s Jun Li and B. Riley Financial CEO Bryant Riley, noted a shift toward stricter underwriting and greater selectivity amid portfolio stress and redemption pressure on business‑development companies.