US private credit market draws institutional funds despite software‑sector turbulence

Private credit has generated headlines this year with redemption gates, default warnings and retail investors pulling money from software‑heavy funds after an Anthropic AI update sparked a sell‑off dubbed the “SaaSpocalypse.” The equity decline was narrow, and institutional investors continued to allocate to the asset class. Quarterly fundraising for US direct‑lending funds raised at least $16 billion in the June quarter, the second‑strongest quarter in four years, even as several retail‑facing funds capped withdrawals.

At the iCapital Engage+ Toronto 2026 conference, speakers described the recent turbulence as a sentiment‑driven cycle rather than a fundamental credit weakness. They emphasized the importance of manager selection, noting that operational expertise and disciplined underwriting now drive private‑credit returns. Vista Equity Partners highlighted AI as a value‑creation opportunity for software platforms, while hedge funds were seen as attractive diversifiers as the traditional 60/40 portfolio loses its correlation benefit.