US Stock Market: Private credit lending slumps in Q2 despite rebound in fundraising

US direct lending volume fell 55 percent quarter-on-quarter to about $33.59 billion in Q2 from $74.67 billion in Q1, marking the lowest lending volume since Q2 2023, according to PitchBook/LCD data cited by Reuters. Despite this, North America-focused closed-end direct lending funds raised $16.25 billion in the quarter, the highest quarterly fundraising in two years, as investors remained cautious amid rising defaults and concerns over software sector exposure. Private equity-backed direct lending volume dropped to $19.40 billion from $44.61 billion, reflecting weaker M&A and buyout activity, while legacy loans from the 2021-2022 credit boom continued to pressure business development companies.