PGIM has announced the final close of PGIM Senior Loan Opportunities II, L.P. (PSLO II), the second amalgamated private credit fund in its middle market direct lending series.
PSLO II closed with over $4.2 billion in available capital commitments, reportedly making it one of the largest middle market direct lending private credit fundraises year-to-date (YTD), while reflecting strong support from a global base of institutional investors.
Following the solid performance of its predecessor, PSLO II has begun offering senior secured loans to mid-sized businesses across Australia, Europe and North America.
The fund has drawn backing from a wide spectrum of institutional investors, ranging from insurance firms and pensions schemes to sovereign wealth funds.
According to PGIM, the fund’s strategy has primarily focused on delivering attractive risk-adjusted returns through a diversified portfolio of directly originated senior loans to both non-sponsored and sponsored issuers.
PSLO II has already begun deploying capital, PGIM confirmed, with a pipeline of opportunities and a well-developed investment portfolio.
Matt Harvey, head of middle market direct lending for PGIM’s private capital business, said that much of the growth in direct lending recently has been in sponsor-backed deals, however, that channel is “no longer sufficient” for investors to achieve appropriate diversification and deployment targets.
“In the US alone, there are around 200,000 middle market companies, and only about 10,000 are private equity owned,” Harvey said. “This means more than 90 per cent of the addressable market remains non-sponsored.”
Harvey added that origination capability is the “cornerstone of success in private credit”.
“...[It] underpins our ability to execute with discipline, benefiting from broader selectivity,” he said.
“In a market characterised by information asymmetry, direct bilateral origination at scale across the middle market – built over years – creates proprietary deal flow and underwriting advantages.”
In June 2025, PGIM confirmed the integration of its fixed income and private credit businesses under a single global capability spanning public and private markets.
The move has created a combined credit platform of nearly $1 trillion, positioning the firm as a leader in both public and private fixed income.
PGIM has been active in direct lending since 2000, initially managing strategies for its affiliate investors.
It now offers a broad suite of direct lending solutions spanning the lower middle market – via its partnership with Deerpath Capital – through to the middle market and large-cap segments, catering to both institutional and high-net-worth clients.
