iCapital platform data shows private credit fund flows fell to 18% in Q1 2026 from 41% a year earlier as investors pivoted to private equity.
Private wealth investors reduced allocations to private credit on the iCapital platform to 18% of total fund flows in the first quarter of 2026, down from 41% in the same period of 2025. The shift reflects growing caution toward the sector despite asset managers’ efforts to highlight its stability.
Most reallocated capital moved into private equity, which surged to 51% of flows from 35% over the same period. Infrastructure and hedge funds also gained share, with infrastructure benefiting from demand for inflation-protected strategies. Within private credit, distressed and opportunistic investments saw a sharp decline, dropping to 3% of allocations in 2025 from 17% in 2023.
Direct lending dominated private credit allocations last year, accounting for 89% of the sector’s flows, while real assets saw modest increases in investor interest.