Large private credit deals dominated the fourth quarter of 2025, driving US direct lending volumes to their highest levels since the second quarter of 2024, according to PitchBook.
Across all deal categories, the data firm tracked $69.8bn (£51.8bn) across 201 deals in the three months to 30 November. The last time it was recorded higher than this was in the second quarter of 2024 at $85.2bn.
Despite this, the fourth quarter of 2025 represented the lowest transaction count since the fourth quarter of 2023.
The increase in direct lending was driven by large transactions, including the $55bn leveraged buyout (LBO) of Electronic Arts (EA), announced in the quarter. The EA buyout is backed by a $20bn debt financing commitment from JPMorgan, of which $18bn is expected to be funded at close.
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Merger and acquisition activity also improved in the quarter, following a weak first half of the year, PitchBook said.
Private credit also issuance continued to grow during the period. By November, LBO volume had reached its strongest point since the second quarter of 2022. Direct lenders issued an estimated $23.7bn of loans to finance buyouts in the three months to 30 November, up from an average of around $20bn in the first three quarters of the year.
The private secondaries market experienced a surge in 2025, with a flurry of large continuation vehicle deals that likely exceeded the cumulative transaction volume of credit secondaries deals over the previous five years, PitchBook said citing data Evercore.
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However, Pitchbook noted that the sector has faced headwinds, with the bankruptcies of subprime auto lender Tricolor and auto parts manufacturer First Brands in September casting a shadow over the quarter.
PitchBook’s survey indicated that concerns among private credit participants shifted in the fourth quarter, with credit stress and loosening borrowing conditions emerging as the main sources of anxiety.
Despite this, overall demand for private credit loans continues to outstrip supply. Much of the opportunity lies in infrastructure finance, including a surge in investment in data centres to support the growing artificial intelligence industry, PitchBook noted.
