Direct lending by US private credit firms fell about 55% quarter-on-quarter in the second quarter of this year to $33.59 billion. According to data from PitchBook and LCD, this lending volume was the lowest since the second quarter of 2023, and the number of deals also declined from 217 to 154. Meanwhile, Preqin data shows that fundraising for North America-focused closed-end direct lending funds surged to $16.25 billion in the second quarter, up from $1.3 billion in the prior quarter, marking the largest total in two years. Although capital inflows continue, lenders are being highly selective amid concerns over defaults, exposure to software companies, and redemption pressures from individual investors. Jun Li of EY noted that a slowdown in M&A activity, deferred fundraising by borrowers, and competition from the syndicated loan market also contributed to the deceleration.