Private Credit Containment Despite Investor Stress

Good morning, ! This week we're covering private credit default rates containment, Advent acquiring FNZ Bank, latest deals in private equity and must read news. 

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THE 60-SECOND BRIEF

The week's pulse in private markets.

• Private credit remains resilient. Default rates are staying contained, but manager selection and underwriting discipline are becoming the key differentiators.

• Global M&A is back in force. Record deal value is being driven by mega-transactions, signaling improving liquidity and stronger strategic confidence.

• Infrastructure is the new battleground. Advent's acquisition of FNZ Bank highlights private equity's growing appetite for the "plumbing" behind financial services.

• Technology continues to dominate dealmaking. From fraud prevention to industrial inspection and construction software, strategic buyers remain focused on AI-enabled and mission-critical platforms.

• The market is reopening—but selectively. Capital is flowing, exits are improving, and deal activity is accelerating, yet the highest-quality assets continue to capture the greatest investor attention.

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PRIVATE CREDIT CORNER

Headline defaults remain low, but the credit cycle is starting to diverge

Despite persistent concerns around borrower quality, private credit default rates remain contained at roughly 2.5%, well below the stress levels many expected after the sharp rise in interest rates. The more interesting story is relative performance. While defaults in the high yield bond market have eased to around 1.5%, private credit has remained consistently higher over the past year, reflecting its greater exposure to highly leveraged middle market borrowers.

That does not necessarily signal a deteriorating asset class. Private credit lenders typically have stronger covenant protection, closer borrower relationships, and more flexibility to restructure before problems become outright defaults. In many cases, defaults represent active portfolio management rather than forced losses.

Bottom line: The era of broad based credit distress has yet to arrive. Instead, underwriting discipline and sector selection are becoming the primary differentiators. As refinancing needs build over the next several quarters, managers that originated conservatively should continue to outperform those that chased yield during the most competitive lending years. (More)

MICROSURVEY

Valuation Multiples

HEADLINE OF THE WEEK

Global M&A Just Hit a New Record. The Real Story Is Who's Driving It.

Global M&A is officially back. Deal volume reached $3.1 trillion in the first half of 2026, surpassing the previous 2021 record of $2.9 trillion and marking a sharp rebound from the post-2021 slowdown. More importantly, this isn't simply a recovery—it's a different cycle altogether.

The headline number is being driven by mega-deals, with transactions above $10B surging as CEOs pursue AI capabilities, portfolio transformation, and strategic scale rather than financial engineering alone. Goldman Sachs notes that global M&A volumes rose 48% YoY, supported by stronger financing markets, abundant private capital, and a more stable regulatory backdrop.

For private equity, this matters for two reasons. First, a healthier strategic buyer market expands exit opportunities after several years of constrained liquidity. Second, renewed confidence in large-cap transactions tends to filter down into the broader middle market over time. The M&A engine isn't just restarting—it's shifting into a higher gear.

Read more

DEAL OF THE WEEK

Advent Bets on the Backbone of Wealth Management

Private equity's next battleground may not be banks—it may be the infrastructure that powers them. Advent International has agreed to acquire FNZ Bank, deepening its exposure to one of the fastest-growing segments of financial technology: wealth management infrastructure.

The acquisition isn't simply about adding another banking asset. FNZ Bank provides the regulated banking capabilities that underpin FNZ's broader wealth management platform, helping investment managers, advisers, and financial institutions deliver integrated investment, custody, and cash solutions. As private wealth continues to expand globally and advisers demand increasingly digital operating models, the infrastructure supporting those services is becoming as valuable as the products themselves.

For private equity, the transaction reflects a broader shift toward owning the "plumbing" of financial services rather than competing in customer-facing businesses. Payment networks, custody platforms, compliance software, and wealth infrastructure have become attractive assets thanks to their recurring revenues, high switching costs, and long-term growth potential. In today's market, the biggest opportunities may lie behind the scenes—not on the balance sheet.

Read more

DEAL TRACKER

$2.4B | Visa → BioCatch (from Permira-advised funds)
Visa signed a definitive agreement to acquire fraud detection platform BioCatch, marking a significant exit for Permira and reinforcing continued consolidation across payments and identity technology. Read more

~$845M | Procore Technologies → DroneDeploy
Procore agreed to acquire DroneDeploy, adding AI-powered drone and robotics capabilities to its construction software platform as demand grows for digital jobsite intelligence. Read more

Undisclosed | Blackstone Energy Transition Partners → DarkVision Technologies (from Koch Engineered Solutions)
Blackstone agreed to acquire DarkVision from Koch Engineered Solutions, adding an industrial inspection technology platform to its growing energy transition portfolio. Read more

Undisclosed | Apollo-managed Funds → Maverick Water Group (from Crosstimbers Capital)
Apollo acquired Maverick Water Group, expanding its infrastructure portfolio with a leading provider of non-potable water solutions serving the energy sector. Read more

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