Private Credit Fundraising Slows, Managers Face LP Hurdles

Fundraising timelines for private credit funds closing in Q1 2025 extended to a median of over 23 months, the longest period recorded since 2008, according to PitchBook’s Global Private Market Fundraising Report. This slowdown is attributed to broader private market fundraising fatigue, driven by LPs' liquidity constraints from slowed private equity investment distributions and increased economic uncertainty, as noted by Allan Majotra of 5Capital Funds Placement.

An oversupply of capital, particularly in direct lending, further exacerbates the challenge, with 70% of direct lending dry powder raised at least three years ago by Q1 2024, according to PitchBook’s 2025 Allocation Solutions report, indicating managers struggle to deploy capital. Despite these headwinds, private credit remained comparatively resilient against private equity and venture capital, accounting for 20% of total private market capital raised in Q1, and investors are diversifying into strategies like asset-backed lending, exemplified by WhiteHawk Capital Partners' successful fund close.

Jess Larsen of Briarcliffe Credit Partners maintains optimism due to the asset class's predictable returns and diverse sub-strategies.