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Weekly Market Summary
Oct 12 to Oct 16,2026
Extra Credit*
•Non-traded private credit funds faced mounting liquidity pressures in Q2 as record redemption demand coincided with the weakest fundraising activity in years. For the first time since at least 2022, shareholder redemptions exceeded new inflows among non-traded business development companies (BDCs), according to PitchBook. Across 27 funds, investors redeemed $8.1 billion while new share issuance totaled just $3.3 billion, resulting in approximately $4.8 billion in net outflows.
•Fundraising fell sharply from $7.4 billion in Q1 and $13.4 billion in Q2 2025, reaching a multiyear low. Despite reports of resilient institutional demand for private credit, the data highlight significant challenges in the non-traded BDC market as retail investor redemptions accelerate and new capital raising slows.
•Leveraged loans are emerging as a new financing source for hyperscale data centers amid the rapid expansion of AI infrastructure. While loans currently account for less than 1% of the AI-related issuer universe, Citi Bank expects issuance to accelerate as collateral-backed financing gains traction. The bank also sees potential diversification benefits, as leveraged loans may offer exposure to AI growth with lower correlation to broader AI-driven movements in equities and bonds
Source: PitchBook
the Aristotle Funds glossary can be found here: https://www.aristotlefunds.com/resources/glossary-of-terms
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Morningstar LSTA US Leveraged Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.
Any discussion of individual companies is not intended as recommendation to buy, hold or sell securities issued by those companies. Aristotle Fund holdings can be found on the fund pages linked above.
Investors should consider a fund’s investment goal, risks, charges, and expenses carefully before investing. The prospectus and/or the applicable summary prospectus contain this and other information about the Fund and are available from AristotleFunds.com. The prospectus and/or summary prospectus should be read carefully before investing.
Investing involves risk. Principal loss is possible.
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