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Business of Private Credit: Sectors and SIC Codes



We've spent the last few weeks covering the businesses of the core middle market. Does that same discipline hold when you move up market?

The way managers organize their underwriting and portfolio management teams is a byproduct of sector focus. Deal selection in the BSL market runs through sector specialists, analysts responsible for specific coverage areas. The core middle market leans towards generalists evaluating businesses on their own merits. The upper middle market uses a generalist model with some industries (e.g. healthcare) deserving more attention. 

Given how the UMM competes with the BSL market, it can reflect the same momentum-driven traits. The hottest sectors and themes tend to make up a larger share of the portfolio. Whether that is energy, retail, or transportation when the economy is running hot, or AI and technology in the post-COVID, low-interest rate world...

Chart of the week

Concentrated Effort

Tech deals favored upper end of market, especially in 2021 when software valuations peaked.



Source: KBRA DLD Research

Quote of the week

“Some of the best opportunities in ‘very boring middle market companies’ are from the ‘old-world economy’ because they face little risk of AI displacement.” 

– Christina Lee,

Oaktree (Bloomberg)

Debtwire Middle-Market


Middle market debt held by BDCs vs High yield vs Treasury yields



The blue line represents the current dividend yield of the VanEck BDC Income ETF (BIZD), which stood at 12%. The fund, which is a proxy for BDCs, paid a dividend of $0.24 per share in July 2026, down 46% YoY and 50% QoQ, lowest on record since June 2013. Yet the trailing-twelve-month distribution of roughly $1.52 still produces a yield near 12%. However, the quoted yield is backward-looking, while the latest quarterly payment is forward-looking evidence that portfolio income could be possibly impacted...

Contact: Suneet Chandvani

Leveraged Lending Insights


US Leveraged Loan Launch Activity Moderates in July

The US leveraged loan market has recorded $14.01b of new launches through Wednesday, July 22, following $20.91b of issuance the previous week. Month-to-date launch volume now stands at $57.48b, representing a sharp decline from July 2025, when $221 billion of loans were marketed to investors during one of the busiest months for primary market activity since Bloomberg began tracking the data in 2013...

Contact: Vincent Daigger

PDI Picks


Private credit hits the target

Our latest fundraising data shows funds are now much less likely to fall short of their capital-raising aspirations. 

The most obvious indication that private credit fundraising is in rude health is the headline fundraising number for the first half of the year – referenced in this column last week...

Contact: Andy Thomson

Leveraged Loan Insight & Analysis


US LBO loan volume reaches ~$90B in 1H26; direct lending holds 43%

US lenders completed a combined US$34bn of syndicated (US$16.94bn) and direct lending (US$$16.6bn) loan volume backing leveraged buyout activity ub 2Q26, pushing half year totals to just under US$90bn...

Contact: Maria Dikeos

The Pulse of Private Equity


PE middle-market TVPI and DPI by fund vintage

Download PitchBook’s Report here.

Going forward, we expect that returns will be driven by disciplined buying and operational value creation, rather than the macroeconomic tailwinds that did much of the work in the 2010s cycle. Altogether, the lower middle market stands out as an opportunity today: less competition, lower multiples, lower leverage, and higher historical returns point to significant upside potential in this segment of the market.

Contact: Garrett Black

KBRA Direct Lending Deals: News & Analysis


KBRA DLD Default Indices

Contact: Eric Rosenthal

Middle Market & Private Credit


JV and FinCo Exposure Can Increase Risk for BDCs

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Elevated off-balance sheet leverage tied to joint ventures (JVs) and finance companies (FinCos) can alter the risk profile of business development companies (BDCs), according to a new Fitch Ratings report. The risk is greater when exposure to these entities represents an outsized proportion of the balance sheet...

Contact: Chris Becker

Private Credit & Deal Origination Insights


US Direct Lending Spread Per Turn of Leverage Widens

To access the full Octus report, please contact us.

Wider spreads and slightly lower leverage provided lenders with better risk-adjusted pricing across all deal sizes in the second quarter...

Contact: Kim Giancaspro

Covenant Trends 


Distribution of accordion F&C tranche EBITDA grower caps (L3M)

Contact: Steven Miller

High-Yield Bond Statistics


Launched volume

New-issue yields

Contact: Robert Polenberg

This publication is a service to our clients and friends. It is designed only to give general information on the market developments actually covered. It is not intended to be a comprehensive summary of recent developments or to suggest parameters for any prospective financing opportunity.