Ares Management projects the private credit market may be poised for even greater gains heading into 2026, thanks to diversified deal activity, expanded investor participation, and a broader role in corporate finance, according to its latest Private Credit Outlook 2026 report.

As banks continue to pull back from middle-market and bespoke lending, private credit managers are stepping in with scale, flexibility, and speed. These are trends Ares believes will accelerate over the next two years despite fears around sticky inflation and a softening labor market.

From Niche To Core Financing Tool

Once viewed as a supplemental source of capital, private credit has become a primary financing option for private equity-backed companies and corporate borrowers alike. Ares noted that deal sizes are increasing, underwriting standards remain disciplined, and direct origination continues to support steady deal flow despite macroeconomic uncertainty.

The firm said borrowers have generally maintained strong earnings growth, helping ...