The Rise of Opportunistic Credit

As direct lending yields tighten and private equity return expectations face pressure, investors are increasingly looking beyond traditional capital solutions. Opportunistic credit sits between senior lending and equity, offering a flexible approach designed to capitalize on attractive risk-return opportunities across changing market environments. Explore why growing refinancing needs, liquidity demands and a shortage of flexible capital are creating a compelling opportunity today. 

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With direct lending yields tightening and private equity return expectations under pressure, opportunistic credit offers investors a timely way to pursue equity-like returns with credit downside protection. That opportunity is strengthened by scarce flexible capital and growing demand for structured solutions driven by refinancing needs, slower M&A activity and LP liquidity demands.
Nayef Perry
Head of Direct Credit Investments

Flexible capital remains scarce

Despite continued growth across private markets, junior and flexible capital represents only a small portion of available dry powder, creating a supply-demand imbalance across the market.

A growing refinancing need

According to the Morningstar LSTA U.S. Leveraged Loan Index as of June 2026, more than $1.5 trillion of U.S. leveraged loans are expected to mature over the next eight years, increasing demand for flexible capital solutions beyond traditional senior lending.

Unlocking value in today’s market

Positioned between direct lending and private equity, opportunistic credit offers flexible capital solutions with differentiated risk-return characteristics and the potential to complement existing credit allocations. 


Our approach to opportunistic credit and unlocking value in today’s market environment 

We seek to capitalize on opportunities that sit between traditional direct lending and private equity. By investing across flexible capital solutions, our approach is designed to pursue enhanced return potential while emphasizing structural protections, downside mitigation and disciplined risk management. Key pillars include: 

  • Focusing on opportunities where flexibility and structuring expertise can unlock attractive risk-adjusted returns.   
  • Leveraging a flexible investment approach across strategies, sectors and security types to target the most compelling opportunities in evolving markets.  
  • Investing alongside experienced, specialized managers with deep expertise across the opportunistic credit landscape.
$97.4B+

Private Credit AUM and AUS* 

$10.9B

Committed to Direct Credit Investments

As of 12/31/25

Footnotes 

1*Inclusive of $20.9B in assets under management and $76.5B in assets under supervision as of December 31, 2025  


The Rise of Opportunistic Credit 

Discover why opportunistic credit is emerging as an increasingly important source of flexible capital in private markets. 


About Hamilton Lane

Our purpose is simple: To provide enhanced financial well-being for those who depend on us. We do that by seeking to deliver tailored, solutions-oriented private markets exposure and industry-leading client service. We’re an organization built on over three decades of client-centricity, candor and authenticity and powered by intellectual rigor and data-driven insight. 

Our commitment to serving those who depend on us has remained steadfast, while our focus on growth and transformation has only strengthened. Today, we serve institutional and private wealth investors around the world, helping them tap into the opportunities afforded by this maturing asset class.

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