Alternative credit deals slump to $162bn in 2025

Dealmaking activity in alternative credit reached $162bn (£117.4bn) in 2025, a decline from previous years in the absence of large transactions, a new report has found.

According to investment adviser Gapstow, there were 28 acquisitions of alternative credit managers and funds in 2025, covering $162bn in alternative assets under management (AUM).

This represents a 35 per cent decrease from the prior two years, primarily because 2025 saw no ‘blockbuster’ deals, with most transactions valued at less than $20m. In comparison, 2024 recorded $259bn of acquired AUM across 36 deals, while 2023 saw $281bn across 34 acquisitions.

The research is based on Gapstow’s proprietary Alternative Credit Acquisition Database, which has analysed 380 transactions since 2012, totalling $1.8tn in acquired AUM.

Gapstow found that almost half of the transactions in 2025 involved the purchase of minority ownership stakes, which accounted for 28 per cent of alternative AUM.

Overall, there was an increase in minority stake deals, alongside investment capital and distribution partnerships.

By strategy, the report highlighted that direct lending was the most sought-after area in 2025, both in terms of deal count and AUM. Notably, the AUM in 2025, $121bn, was substantially higher than the six-year average of $82bn. Overall, 75 per cent of transactions, and 75 per cent of AUM, targeted direct lending specialists.

Gapstow’s report stated that in 2026, it expects acquisition activity to remain elevated, with a rise in acquisitions of firms that already have minority owners. Strategic alliances are also expected to play an increasingly important role in the acquisition landscape, particularly for larger alternative credit managers, alongside a few larger “mergers of equals”.

“Overall, we believe that acquisition activity will remain strong as alternative credit managers continue to face pressure to build scale and scope,” the report concluded.