PGIM Private Credit Fund

What they do

PGIM Private Credit Fund is an externally managed, non-traded BDC that provides customized financing solutions, including senior secured loans, unitranche loans, and other debt investments, to U.S. and select non-U.S. middle-market companies. The fund is managed by PGIM Investments LLC and aims to generate current income and capital appreciation through a diversified portfolio. As of June 30, 2026, the fund held total assets of $449.0 million and shareholder equity of $294.4 million.

Revenue drivers

• Interest income from portfolio investments — The primary revenue source is interest income from originated and acquired loans, including delayed draw term loans, revolvers, and other debt instruments, such as loans to HEF Safety Ultimate Holdings, LLC, Skyrodema Bidco, LLC, and TSS Investment Holdings, LLC.
• Asset-based lending facility — The fund has established an asset-based lending facility that provides leverage to enhance returns; the facility is used to fund investments and is a key component of the fund's financing strategy.
• Investment gains and other income — The fund also earns income from equity co-investments, dividend income, and realized and unrealized gains on investments, though interest income is the dominant driver.

Recent performance

Net income increased from $9.6 million in 2023 to $15.1 million in 2024 and to $21.8 million in 2025, reflecting continued portfolio growth. However, operating cash flow was negative and worsened from -$83.2 million in 2023 to -$94.3 million in 2024 and -$128.0 million in 2025, primarily due to investment funding outflows. As of June 30, 2026, the fund reported total assets of $449.0 million, total liabilities of $154.6 million, and cash and equivalents of $13.2 million, indicating a growing balance sheet but limited liquidity headroom.

Strategy

The fund focuses on originating private credit investments in middle-market companies, often with structural protections such as covenants and collateral. It utilizes leverage through a revolving credit facility and other borrowings to enhance returns, while maintaining RIC and BDC qualification. The fund also selectively invests in foreign markets, as evidenced by loans to entities in the United Kingdom and France, and hedges currency exposure through forward contracts.

Risks

• Credit risk — The portfolio consists of loans to middle-market companies that may default, especially in an economic downturn; non-accruals would reduce interest income and potentially lead to impairments.
• Liquidity risk — Negative operating cash flow and a relatively low cash balance ($13.2 million) against $154.6 million in liabilities could strain the fund's ability to meet funding commitments or repurchase shares if investor redemptions spike.
• Leverage risk — The use of borrowings, including an asset-based lending facility, magnifies the impact of investment losses and could subject the fund to margin calls or forced asset sales if asset values decline.
• Interest rate risk — Changes in the general interest rate environment affect the fund's net investment income and the fair value of its floating-rate and fixed-rate investments, as noted in the forward-looking statements.

Outlook

Management highlights the ability to raise capital and repurchase shares as key to executing its investment strategy, and continues to rely on PGIM Investments for sourcing and monitoring investments. The fund expects to benefit from elevated inflation and supply chain disruptions if they increase borrowing needs among portfolio companies, but also acknowledges uncertainty in economic conditions. Management remains focused on maintaining RIC and BDC status and navigating regulatory changes.