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Q3 2026 Market Perspectives

Deerpath Capital Q3 2026 Market Perspectives graphic with blue geometric background.

After two years of relative calm, the bond market is moving again, this time at both ends of the curve. That favors conservative underwriting and reminds allocators that floating-rate private credit and long-dated public bonds respond to rising rates in opposite ways. This quarter’s letter examines where the crossover between lender income and borrower debt service occurs, why dispersion is widest in the lower middle market, and why the averages reveal less than a look beneath the surface.

 

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Deerpath Capital is an established private credit manager providing customized, cash-flow-based senior debt financing to sponsor-backed U.S. lower middle market companies. With a singular focus on this segment for nearly two decades, the firm has invested over $16 billion across more than 1,300 transactions and manages over $9 billion in AUM as of June 30, 2026. The firm operates through regional origination and underwriting teams in the U.S., which are supported by global investor coverage across major U.S. markets and Europe, Japan, Korea, and the Middle East. The firm’s focused strategy, deep lower middle market expertise, long-standing sponsor relationships, disciplined credit philosophy, and comprehensive direct lending platform define the Deerpath Difference.
 

Antonella Napolitano   
Managing Director, Head of Investor Relations   
ANapolitano@deerpathcapital.com
646-786-1019

Nelson Pereira 
Director, Insurance Investor Partnerships 
NPereira@deerpathcapital.com
203-517-6082
 

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