Industry
Tech
Jan 5, 2026
5 min
The private credit market now manages close to $2 trillion in assets, representing 17% year-over-year growth (Alternative Credit Council). With projections pointing toward $3 trillion by 2028, capital formation is no longer the defining constraint.
Instead, 2025 revealed a structural challenge: operating at scale without introducing fragility. As portfolios grew larger and more complex, operational demands increased disproportionately. What was previously handled through incremental staffing or spreadsheet-driven workflows now required fundamentally different infrastructure.
Platform activity reflected this shift: loans managed increased 170% year-over-year, with average monthly transactional activity growing 2.5×.
The following trends emerged from publicly available industry research and operational patterns observed across the Hypercore platform in 2025. Industry context draws on surveys, regulatory developments, and market research. Platform data reflects aggregated, anonymized activity across private credit portfolios managed on Hypercore.
As deal sizes increased throughout 2025, multi-lender and multi-entity transactions surged. Private credit funds increasingly participated as anchor investors in broadly syndicated deals, while club-style arrangements became the norm for large-cap transactions.
The convergence between private credit and the broadly syndicated loan market is now unmistakable. Proskauer's Private Credit Group has been involved in over 1,600 deals representing $420 billion in transaction value over the past five years, with a significant portion structured as "clubbed" credits requiring coordination across multiple lenders (Proskauer, 2025). Troutman Pepper reports that direct lending facilities now commonly involve "one to six other lender participants in a club-style deal" as funds move upmarket into BSL territory, with deal sizes increasingly exceeding $1 billion (Troutman Pepper, May 2025). Sponsor-backed deals worth more than $1 billion are on pace to reach 130 signed transactions in 2025, up from approximately 100 in 2024, reflecting both the scale of capital deployment and the structural complexity it requires (Lexology/Paul Weiss, Q3 2025).
Platform data reflected this trend directly. Funding source management module activity increased 234% year-over-year, with average funding entities per deal rising nearly 4×.
Some of the operational implications of this include managing pro-rata allocations, waterfall distributions, and multi-party reporting across syndicated structures requires infrastructure that scales with deal sophistication.
The ILPA's updated Reporting Template, released January 2025 and effective Q1 2026, significantly expanded the scope of partnership expense reporting - a shift that reflects years of LP pressure for greater visibility into fund economics. For private credit fund managers, the changes directly affect how portfolio performance and fund-level expenses must be disclosed.
The new template increased required expense categories from 9 to 22, introducing separate disclosure of expenses paid to the GP versus third parties, subscription facility fees and interest, and internal chargeback breakdowns (ILPA Reporting Template v2.0, January 2025). The template now also requires IRR and TVPI calculations both with and without subscription line impact, addressing long-standing LP concerns about the distortion of performance figures through leverage timing (Gen II Fund Services, August 2025). Over 300 organizations - including LPs, GPs, fund administrators, and consultants - contributed to the development process, and ILPA removed the ability to modify the template, including repurposing or reordering line items, creating a uniform standard that eliminates the inconsistencies that previously frustrated cross-fund comparison (ACA Group, June 2025).
For fund managers, this means that loan-level data must flow cleanly into fund-level reporting. Interest income, fee allocations, and expense attribution must be trackable at the individual loan level to support the granularity ILPA now requires.
Platform users generated more reporting volume than ever before. Statement and report generation increased 289% year-over-year, with intraperiod statement requests growing 2.6× - reflecting LP demand for continuous visibility rather than quarterly packages.
In a competitive fundraising environment, reporting quality is a differentiator - not a commodity.
ACA Group
The regulatory landscape for private funds evolved significantly in 2025. While the SEC's Private Fund Adviser rules faced legal challenges, the underlying expectations for transparency, audit trails, and governance controls became embedded as industry best practice, and increasingly, as LP due diligence requirements.
New data security requirements under amended Regulation S-P, adopted by the SEC in May 2024, became effective December 3, 2025 for larger fund managers (those with $1.5 billion or more in AUM). The amendments require investment advisers to maintain written policies and procedures for incident response programs, including customer notification within 30 days of discovering unauthorized access to sensitive data.
Operational infrastructure must support structured approval workflows, maintain comprehensive audit trails, and integrate with broader compliance infrastructure. The ability to demonstrate who accessed what data, when, and why is no longer optional.
Platform data confirmed this shift. Control layer and approval workflow usage increased 178% year-over-year, with audit trail queries up 245%.
Geographic diversification of loan portfolios accelerated throughout 2025, driven by LP demand for non-US exposure and relative value available in European markets.
According to CSC's Private Credit 2025 report, 79% of GPs anticipate growth in cross-border private credit over the next three years - yet 92% of LPs express concern over the operational complexity these deals introduce, citing inconsistent reporting standards and unclear risk frameworks (CSC, December 2025). Europe-focused private credit funds raised $25.7 billion in Q1 2025, nearly tripling the $9.3 billion raised by US-focused counterparts (Preqin via Hayfin, July 2025).
Approximately 90% of private credit professionals surveyed across Europe report that cross-border direct lending deals are increasing, with 37% describing the increase as significant (Ocorian/Nordic Trustee, August 2025).
For fund managers, multi-currency portfolios introduce complexity at every stage: origination in local currency, hedging and FX exposure tracking, interest accruals across rate conventions, and consolidated reporting in the fund's base currency. Without integrated infrastructure, these workflows fragment across spreadsheets and parallel systems.
Platform data mirrored this expansion. Multi-currency module activity increased 312% year-over-year, with EUR, GBP, and CAD denominations representing the fastest-growing segments outside USD.
AI adoption in private credit has historically concentrated on pre-close activities; document extraction during due diligence, borrower data validation, and deal screening. These tools have proliferated, but they remain largely disconnected from the systems where loans are actually managed. Post-close operations, servicing, amendments, covenant monitoring, have been slower to benefit.
The industry recognizes both the opportunity and the gap. According to a 2025 survey by Ocorian and Nordic Trustee, 100% of private credit professionals surveyed plan to adopt AI, blockchain, or machine learning to improve efficiency over the next two to three years. Nearly half (47%) plan to increase their data automation and machine learning budgets by 25% or more. Yet only 46% said technology has transformed loan monitoring and servicing, compared to 72% for credit risk assessment and underwriting.
Most AI development in loan servicing has targeted bank lending and consumer finance workflows, where high volumes of standardized loans justify automation investment. Private credit fund managers face different challenges: multi-tranche structures, waterfall allocations across funding sources, bespoke covenant packages, and reporting that must flow to both borrowers and LPs.
What's emerging now is an AI layer embedded directly in the loan management platform - not standalone tools requiring manual handoff. The ability to move from a parsed credit agreement to a live loan record, with payment schedule, covenant triggers, and servicing workflows automatically configured, requires AI that understands the data model it's populating.
Man Group reports that AI-powered document processing has reduced processing time per document from 15 minutes to three minutes in its private credit operations (Alternative Credit Investor, November 2025). A 2025 State Street study found that 77% of North American institutional investors are using or plan to use generative AI to handle unstructured data in private markets (Global Legal Insights, November 2025).
Platform data reflected this gradual shift. AI-assisted workflow interactions increased 198% year-over-year, with the fastest growth in post-close use cases: automated credit agreement mapping, loan term and schedule generation, and agentic servicing task support. Early adopters are already realizing these benefits, even as the broader market remains in experimentation mode.
What 2025 revealed is that operational complexity is compounding. Multi-lender deals, expanded LP reporting, regulatory scrutiny, cross-border portfolios, and AI-enabled workflows are not separate challenges, they are interdependent. A fund managing club deals across multiple currencies needs reporting infrastructure that satisfies both syndicate partners and LPs. A fund scaling its portfolio with AI-assisted onboarding still needs audit trails that meet Regulation S-P requirements. The threads connect.
The fund managers best positioned for 2026 are those building infrastructure that treats these demands as a single system, not a collection of point solutions stitched together with spreadsheets. The data suggests that shift is already underway. Whether it happens fast enough to match the pace of market growth remains the open question.
This report draws on aggregated, anonymized operational data from private credit portfolios managed on the Hypercore platform throughout 2025. Industry data and regulatory references are sourced from: Alternative Credit Council, ILPA, Gen II Fund Services, ACA Group, Proskauer Rose LLP, SEC, Troutman Pepper, Lexology/Paul Weiss, CSC, Ocorian/Nordic Trustee, Preqin, Hayfin, Apollo, Man Group, State Street, and Global Legal Insights.
Data Management
Thought Leadership
Dec 1, 2025
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