Private Credit Benchmark Review Q2 2026
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Executive Summary
This report reviews private credit fund performance by vintage and sub-asset class through the first quarter of 2026. Private credit is holding up well, though much of that strength remains unrealized: recent vintages are posting the strongest returns of the current cycle, but most of that value has not yet been paid out to LPs, and closing that gap is the central question facing the asset class. Beneath the headline numbers, more flexible strategies, including special situations, opportunistic credit, and mezzanine, have generally outperformed direct lending and diversified funds in recent vintages, while asset-based strategies have emerged as a steadier area of strength.. At the same time, performance is starting to diverge more across managers as the credit cycle matures, putting a greater premium on selection and underwriting discipline.
Key Takeaways
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Recent-vintage performance remains solid: Median net IRRs were 11.8% for 2022, 10.8% for 2023, and 9.4% for 2024, ahead of most 2013-2021 vintages. The 2024 vintage is still very early.
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Distributions remain the open question: Median DPI is 0.34x or lower for every vintage from 2021 onward, which is normal at this stage rather than a warning sign. The real test is whether these vintages catch up to where the 2013-2018 cohort stood at the same age, and there is not yet enough data to say.
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Flexible strategies have generally outpaced direct lending: Managers with the mandate to invest across the capital structure, rather than originate standard senior loans, have had an edge in recent vintages.
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Credit stress is becoming more visible beneath solid headline numbers: The gap between top- and bottom-quartile IRR widened from 3.9 points in 2020 to 9.8 points in 2024, alongside rising defaults and payment-in-kind usage this quarter.
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