Private Credit and the Importance of Club Deals

Jacqueline Baum
Analyst

Key Takeaway

As Investment Grade Private Credit grows, smaller club deals can offer investors greater pricing power and allocations.

The Investment Grade Private Credit (IGPC) market is dominated by large, agented deals. They typically involve dozens of investors, potentially pressuring allocations and spreads for deals where demand outstrips supply. PPM supplements our volumes in widely-syndicated deals with smaller club deals, which accounted for 10% of our 2025 IGPC production.

Club deals are IGPC transactions syndicated by bankers in smaller dollar amounts to smaller groups of investors, say 1-8 accounts versus 20-40. An issuer may like a club deal because of:

• Execution certainty (smaller investor base can provide feedback and allocation targets earlier)
• Execution efficiency (fewer wires to track on the day of funding)
• Increased privacy (restricting information/disclosures to a smaller group)
• Less burdensome marketing (fewer questions from smaller, often existing, investor group)

An investor may like a club deal due to the potential for better allocation outcomes and pricing power. They often involve nuanced credits or complex structures which certain investment shops restrict. Accordingly, club deals are spread across a smaller, more targeted pool of investors where each investor can more closely pick their bite size, and they are generally executed at higher spreads. As an example, the weighted-average spread of our club deals in 2025 was nearly 200 bps versus approximately 150 bps across all deals.

PPM expects our share of club deals to increase in the coming years, which we attribute to staying active in the market, maintaining strong relationships with deal syndicators and bankers, and remaining flexible on different IGPC structures (e.g., no external ratings, delayed draws).

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