Is Private Credit Moving from Alternative to Core?

A Look at private credit’s journey
The private credit market ended last year with a story of resilience, expansion, and transformation. What was once considered a niche alternative to bank lending has now become a core financing channel across many private credit strategies, attracting institutional investors, sovereign wealth funds, and increasingly retail investors. The question that now dominates boardrooms and investment committees is not whether private credit is here to stay, but how it will evolve in 2026; a year expected to be defined by maturity, diversification, and transparency.

Banks and private lenders converge
A major shift over the year was the growing convergence between banks and private lenders. Instead of competing head-to-head, more activity moved into partnership models such as forward flow arrangements, co-originations, and loan purchases, helping keep credit available while sharing balance sheet and underwriting load. As these structures scaled, they also created a real operating challenge for capital markets and treasury teams, especially where facility leverage and reporting had to be managed across multiple parties.

In this context, Oxane Partners has been building the connective tissue: Oxane Panorama digitizes and configures facility terms, automates borrowing-base production, produces compliance reports, and aggregates risk across back leverage, portfolio finance, NAV, and subscription lines for both borrowers and lenders, bringing speed and control to bank-fund linkages that used to run on spreadsheets.

Against that backdrop, private credit held up well. Direct lending activity remained resilient, and buyout financing stayed active, reinforcing private credit’s role as a reliable source of capital when execution certainty mattered.

In practice, this tended to align incentives across the ecosystem. Borrowers benefited from speed, flexibility, and clearer certainty of close. Banks were able to stay engaged in credit markets while managing balance sheet intensity. Private credit managers, investing on behalf of their LPs, deployed into well-structured assets. In many situations, it offered a more reliable path to execution than traditional bank lending and public debt markets, especially when speed, documentation control, and certainty of close mattered.

Private Credit+ broadens the canvas
Beyond mid-market corporate lending, private credit also broadened its opportunity set. Asset-based finance accelerated, supported by investor demand for longer-duration, cash-flowing assets and more bank–manager partnerships across consumer, equipment, and specialty finance. Infrastructure credit gained momentum as well, particularly in data centres and power, drawing multi-asset strategies that balance carry, duration, and collateral.

Oxane’s platform is built for the broader Private Credit+ opportunity, spanning corporate credit, asset-based finance, fund finance, securitized products, whole loan portfolios, SRTs, CRE, and project finance. It brings these strategies onto one operating system, Oxane Panorama, supporting the full lifecycle from origination and portfolio monitoring to valuations, servicing, and reporting across both assets and liabilities. In ABF specifically, Oxane helps lenders and borrowers digitize facility terms, streamline borrowing base and compliance workflows, and scale portfolio-level monitoring with a single source of truth.

Valuations move up the agenda
Valuations became a bigger focus as rates shifted and borrower performance became more uneven across sectors. Even with risk-free yields easing from recent highs, managers still had to balance lower base rates against higher uncertainty around cash flows and refinancing. That pushed more scenario-based valuation work and borrower-level sensitivity analysis, including testing margin compression and higher working capital needs, rather than relying on top-down macro assumptions.

Semi-liquid vehicles and retail channels also raised the bar, accelerating the move toward more frequent NAVs, tighter governance, and audit-ready valuation files. The growth of credit secondaries added further pressure for consistent calibration, as transactions increasingly reference manager marks. Together, these shifts are tightening expectations around discount-rate construction, documentation, and how risk is priced across direct lending and asset-based finance.

Oxane’s Valuations offering enables scenario-driven marks for illiquid positions, including corporate loans, granular loan pools, and risk transfer trades. It sits in the same operating environment as portfolio monitoring and leverage management, so valuation changes can be tied back to borrower performance, portfolio mix, and facility-level exposures.

Secondaries and AI-linked infrastructure
Another notable development was the rise of credit secondaries, which evolved into a practical liquidity solution for LPs and managers navigating duration constraints and portfolio rebalancing needs. Separately, AI-linked infrastructure also drew growing attention, unlocking private credit opportunities across data centres, semiconductors, and related supply chains, with large-scale financings supporting continued buildout in compute, power, and connectivity.

Here too, the operating stack matters: Project/Infrastructure Finance coverage and Oxane Panorama’s cross-asset coverage unifies monitoring, risk, and ESG data across multi-asset strategies, allowing managers to link underwriting assumptions with real-time project performance as AI-related credit opportunities scale.

Deal activity and funding signals
December 2025’s monitor showed a Q4 slowdown in deal volumes and count, but 2025 still ranked as the second busiest year in at least eight years for direct lending. Pricing held up too: the typical spread on PE-backed acquisition loans was around 4.75% over the benchmark rate, and private credit and middle-market CLO issuance reached a record $43.1 billion before easing in the final quarter. Together, that points to a constructive setup for 2026, even as execution remains selective and pricing stays disciplined.

Fundraising also shifted toward larger vehicles and financing formats that can support bigger deal sizes. The growth of private credit CLOs has expanded capacity for unitranche and club deals, even as issuance can fluctuate quarter to quarter. That depth matters in 2026, especially if sponsor-led activity improves as rate volatility eases. Even so, deployment is likely to remain selective, with pricing discipline and documentation staying non-negotiable.

Spread dynamics in a lower-rate environment present another challenge. Competition intensifies and spreads compress, particularly on large, high-quality deals. Managers aim to preserve net returns via structural protections, robust documentation, and selective asset choices, favouring senior-secured positions, dialling down leverage, and prioritizing cash-flow visibility. In that environment, the edge comes from consistency: disciplined screening, controlled collaboration, and clean handoffs from underwriting to portfolio.

Collateral monitoring is where process advantage compounds outcome advantage - helping institutions see risks before they surface. By centralizing documents through a secure depository, automating collateral-level reminders and alerts, running stress tests and scenario analysis, and strengthening obligor-level oversight, Oxane gives both banks and private credit managers deeper transparency and earlier detection of weaknesses, reinforcing structural protections and keeping teams ahead of risks in an increasingly selective market.

From growth to guardrails
As private credit+ scales up, transparency is moving from a preference to an expectation. Concerns over borrower health, rising leverage, and the growing use of payment-in-kind (PIK) interest have intensified calls for clearer disclosure. Many private loans remain unrated and less visible, and lenders and investors are demanding better insight into covenant compliance and refinancing paths.

Oxane’s AI for Private Credit adds a layer of operational vigilance - automated extraction of covenant terms, deadline tracking, anomaly detection in borrower reporting, and conversational analytics across documents and datasets, so portfolio teams see around corners and intervene early.

Governance around valuations is tightening in parallel. Regulators and LPs are scrutinizing valuation processes for illiquid portfolios, pushing managers toward stronger control frameworks, more independent oversight, and audit-ready documentation. More frequent marks for semi-liquid vehicles and the growth of secondaries have raised the cost of inconsistency, making repeatable methodology and clean audit trails harder to compromise on.

How the next phase plays out
In 2026, the narrative shifts from rapid expansion to consolidation and maturity. Larger transactions are increasingly being funded through private credit, alongside continued growth in asset-based finance, infrastructure credit, and secondaries. With a mixed macro backdrop, the differentiator is less volume and more discipline: underwriting that holds up under stress, documentation that protects downside, and early-warning monitoring that surfaces issues before they become workouts.

Bank partnerships add complexity and raise the bar on reporting and governance across parties, especially where leverage, compliance, and exposure aggregation sit across multiple facilities and counterparties. Defaults will remain part of the cycle, and the advantage will sit with managers who intervene early and run workouts with speed and structure.

Oxane’s Platform × People approach has been calibrated for that shift: Panorama unifies portfolio management, leverage management, valuations, servicing, data, pipeline, and AI in one environment, backed by a team of domain experts, so managers can evidence risk, respond faster, and scale smarter across Corporate Credit, ABF, Fund Finance, SRTs, securitized loans, CRE, and project finance.