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Private Credit Meets Resistance and EQT Makes a $15B Move
Call it a market in transition, not surrender. The survey shows banks still competitive in the mid-market
Good morning, ! This week we're covering banks vs private credit competitiveness, how Wall Street is creating ways to short private credit exposure, UK PE investments in 2025, and EQT $15B Asia bet.
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MICROSURVEY
Banks Hold the Line (Mostly)
Call it a market in transition, not surrender. The survey shows banks still competitive in the mid-market (33%), rising to 37% among bankers—unsurprising, given their edge on pricing and relationships. Large-cap? Still alive, but wobbling: 28% see banks as competitive, while consultants are notably less convinced.
The real shift is selectivity. Among PE sponsors, 28% say banks only show up for top-tier names—a quiet admission that access is no longer universal.
Meanwhile, private credit keeps winning on speed and certainty, especially as deal complexity climbs.
The takeaway: Banks aren’t disappearing—they’re narrowing their strike zone. And in a bifurcated market, who you are matters just as much as what you’re buying. (More)
PRIVATE CREDIT CORNER
Private Credit’s Structural Flaw
Private credit is facing its first real stress test. The Financial Times reports Wall Street is now creating ways to short private credit exposures—usually a sign an asset class has grown large, richly valued, and controversial enough to attract skeptics.
The structural flaw is simple: illiquid assets sold with liquid expectations. Private credit funds make long-dated loans to middle-market companies, yet newer vehicles increasingly promise periodic redemptions. When sentiment turns, withdrawals rise while the underlying loans cannot be sold quickly without steep discounts. That creates gating risk, valuation disputes, and pressure on lenders.
A second vulnerability is the bank linkage. Large U.S. banks hold roughly $180 billion of loans to private credit firms, led by JPMorgan ($50B) and Wells Fargo ($36.2B). If private funds come under pressure, banks may not face existential risk—but they are not fully insulated from spillover effects.
Still, this isn’t subprime 2.0. Unlike 2008, private credit is smaller, less embedded in household balance sheets, and not sitting at the core of the payments system. Defaults may rise, but the more likely outcome is contained stress rather than systemic collapse.
Bottom line: The real risk is not a Lehman-style shock, it is a slow squeeze: gated funds, reduced lending, tougher refinancing conditions, and weaker economic growth. (More)
PRESENTED BY EXACT INSIGHT
95%+ Qualified Respondents Start With a Better Research Process.
Private equity teams do not struggle to find information. They struggle to trust it.
When a deal is live, weak respondent quality can create false confidence, wasted diligence cycles, and more work for teams already moving at speed. Traditional expert networks can help firms access conversations, but access alone does not guarantee quality, repeatability, or decision-ready research. By contrast, Exact Insight is built around 95%+ qualification rates, helping firms start with stronger inputs from the beginning.
That matters even more when timelines are compressed and teams are expected to move from initial diligence to sharper thesis validation without slowing down. If the inputs are inconsistent or difficult to verify, speed quickly becomes a liability rather than an advantage.
That is why more firms are raising the bar on the data behind their diligence. Better decisions start with better inputs.
REGIONAL FOCUS
UK Capital Flows Pick a Clear Winner
Global private capital is not treating the UK as one market. It is treating it as a set of sector bets.
In 2025, Financials led PE and VC backed investment at $7.2B, well ahead of Industrials at $4.36B and Healthcare at $3.23B. Consumer reached $1.17B, while Real Estate and Materials barely registered.
The message is straightforward. Sponsors are chasing sectors with recurring revenue, pricing power, and clearer paths to scale. Financials fits that mold through payments, wealth platforms, specialty lending, and software enabled services. Industrials reflects renewed appetite for infrastructure, supply chains, and reshoring themes. Healthcare remains durable as investors seek non cyclical growth.
What matters for dealmakers is what did not attract capital. Real Estate at $128M suggests investors still want more clarity on rates and valuations. Materials at $98M shows limited enthusiasm for capital intensive stories without near term catalysts.
Strategic takeaway: UK capital is concentrating, not broadening. Firms that can source proprietary opportunities in financial services, industrial tech, and healthcare should command the strongest momentum in 2026. (More)
DEAL OF THE WEEK
EQT Goes Big in Asia
EQT just closed a $15.6B Asia buyout fund—the largest in the region’s history, and a not-so-subtle signal that Asia is back on LP agendas.
The fund beat its $12.5bn target and edges past KKR’s $15bn (2021) record. Notably, ~75% of capital came from outside Asia, led by the US (~30%), as global investors chase geographic diversification amid volatility.
There’s also fresh blood: 75 new LPs joined, many already in EQT’s ecosystem.
Why now? Improving exit conditions and the rise of continuation vehicles are easing liquidity concerns that previously cooled appetite—especially around China.
The takeaway: This isn’t just a fundraise—it’s a reopening trade on Asia, with EQT positioning early and at scale. (More)
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Mark Zuckerberg