PGIM announces final close of a $4.2 billion direct lending fund for the middle market segment
10 SEPT, 2025
By Joanna Piwko from RankiaPro Europe
PGIM has announced the final close of PGIM Senior Loan Opportunities II, L.P. (“PSLO II”), the firm’s second hybrid private credit fund available to non-affiliated investors within its middle market direct lending platform. PSLO II closed with more than $4.2 billion in investable capital commitments, making it one of the largest middle market private credit funds to date and reflecting the strong backing of a solid base of institutional investors worldwide.
Building on the success of its predecessor, PSLO II will provide senior secured financing to middle market companies across North America, Europe, and Australia. The fund raised commitments from a diversified group of institutional investors, including insurance companies, pension funds, and sovereign wealth funds.
PSLO II’s strategy focuses on achieving risk-adjusted returns through a diversified portfolio of senior loans made directly to both sponsor-backed and non-sponsored issuers. The fund has already begun deploying capital, with a strong pipeline of opportunities and a well-structured investment portfolio.
Much of the growth in direct lending in recent years has been driven by sponsor-backed deals. However, that channel alone is no longer sufficient to meet investors’ diversification and return objectives. In the U.S. alone, there are roughly 200,000 middle market companies, of which only about 10,000 are owned by private equity funds. That means over 90% of the potential market is outside private equity and other financial sponsors. Our ability to access both sponsored and non-sponsored opportunities is a key differentiator recognized by our investors.
Matt Harvey, Head of Middle Market Direct Lending at PGIM
As a long-standing player in private credit, PGIM has been managing direct lending strategies for its investors since 2000. Today, PGIM offers a full spectrum of direct lending strategies spanning the lower/middle market (through its partnership with Deerpath Capital), the middle market (with tailored strategies for institutional and HNW investors), and the large-cap segment.
In June 2025, PGIM announced it would combine its fixed income and private credit businesses into a single global platform spanning public and private markets—creating a leader in both public and private fixed income with nearly $1 trillion in credit assets under management.
