PGIM, the global asset management business of Prudential Financial, Inc., has closed its latest middle market direct lending vehicle, PGIM Senior Loan Opportunities II, L.P. (PSLO II), securing over $4.2 billion in capital commitments from institutional investors.
This is PGIM’s second commingled private credit fund open to unaffiliated investors in this strategy. The fund aims to provide senior secured financing to middle market companies across North America, Europe, and Australia.
Investors in PSLO II include insurance companies, pension funds and sovereign wealth funds.
“Much of the growth in direct lending in recent years has been in sponsor-backed deals. But that channel is no longer sufficient to achieve appropriate diversification and deployment targets for investors,” said Matt Harvey, head of middle market direct lending at PGIM Private Capital. “In the US alone, there are around 200,000 middle market companies, and only about 10,000 are private equity owned. This means more than 90% of the addressable market remains non-sponsored. Our ability to capture both sponsored and non-sponsored channels is a differentiator and has been validated by our investors.”
The fund’s strategy focuses on directly originated senior loans across a broad range of industries and borrower types. Harvey added: “Origination capability is the cornerstone of success in private credit as it underpins our ability to execute with discipline, benefiting from broader selectivity. 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 announced the integration of its fixed income and private credit businesses into a single global credit capability spanning public and private markets, bringing together nearly $1 trillion in assets under management across the platform.
Harvey commented: “Much of the growth in direct lending in recent years has been in sponsor-backed deals. But that channel is no longer sufficient to achieve appropriate diversification and deployment targets for investors. In the U.S. alone, there are around 200,000 middle market companies, and only about 10,000 are private equity owned. This means more than 90% of the addressable market remains non-sponsored. Our ability to capture both sponsored and non-sponsored channels is a differentiator and has been validated by our investors.”
Harvey continued: “Origination capability is the cornerstone of success in private credit as it underpins our ability to execute with discipline, benefiting from broader selectivity. 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.”
