Q2 2026 witnessed improved sentiment across private markets, but not in a uniform way. Larger managers and those who have a track record of delivering DPI kept fundraising at a strong pace, whilst smaller managers with weaker DPI did not. In this environment, smart financing has come to the fore.
We’ve highlighted some of the key takeaways below. You can request the full report at the bottom of the page.
- Exits: The exit market is improving, but the recovery remains concentrated in larger assets. For many managers, slower distributions and pressure to demonstrate DPI continue to weigh on fundraising.
- Secondaries: The secondary market is on course to reach $250 billion in 2026, with activity growing across LP-led and GP-led transactions. This is creating demand for financing across continuation vehicles, secondary acquisitions and back-leverage.
- Bank exposure: New regulatory data is providing much greater visibility into banks’ exposure to fund finance and the wider NDFI market. Banks remain active, but as exposure grows and balance-sheet capacity comes under greater scrutiny, GPs should be looking to diversify their lender base.
- ABF: Private capital accounts for just 5% of the $7 trillion ABF market, leaving significant room for growth. As ABF portfolios develop, subscription lines, Credit ABL and NAV can provide financing at different stages of a funds ramp.
- Interest Rates: Higher-for-longer rates are increasingly the expectation. With assets being held for longer and financing costs remaining elevated, flexibility around maturity, capacity and refinancing is becoming more important.
One observation from our own origination is that we are seeing more GPs include both RCF and term loan components in subscription lines from the start of fund life, fixing the most capital-efficient structure at the outset rather than renegotiating it later.
NLC reached $13 billion in funded deployments as of Q2 2026 and marked the earlier $10 billion milestone with clients and partners.
Request the full report from NLC.