For private equity-backed and non-sponsored transactions.
Our investment approach
Drawing on our depth of experience, the Direct Lending team excels in sourcing, analyzing, and executing financing facilities in the middle market segment. We’ve established ourselves as a reliable financing partner for distinguished private equity sponsors, providing debt financing for lower and core middle market companies across a broad range of industries to support leveraged buyouts, refinancings, recapitalizations, and growth.
Defined middle market borrower size: Companies with EBITDA of $5 million or greater.
Consistent execution: Standardized underwriting process offers speed and efficiency from initial review through loan funding.
Communication and responsiveness: Value-add diligence throughout investment process enhances client’s investment thesis.
Flexible approach to investing: Ability to invest up-and-down the capital structure, from senior secured through junior subordinated securities.
Experience across industries and through market cycles: Seasoned investment team underwrites and invests with conviction across broad array of sectors.
Reliable partnerships: Supportive of borrowers throughout investment lifecycle, including add-on acquisitions.
Investment criteria
- Investment style: Lower and core middle-market direct lending
- Facility size: $25 - $500 million target facility size
- Company size: Minimum of $5.0 million of EBITDA
- Situations: Leveraged buyouts, Refinancings, Growth capital, Recapitalizations, Add-on acquisitions, Minority buyouts
- Investment structures: Senior (revolvers, TLs, DDTLs), Senior stretch, Unitranche, Second lien, Mezzanine, Split-lien, Holdco notes
- Industries: Technology/software, Healthcare, Business/financial services, Consumer, Industrials
- Geography: Primarily North America
Transactions
We have closed on over $4B in commitments since launching in 2020, demonstrating our ongoing commitment to middle market private credit.
Recent transactions
Notable transactions recently completed. View recent transactions (PDF).
Leveraged Buyout
Administrative Agent
January 2026
Leveraged Buyout
Sole Lender
December 2025
Facility Upsize
Sole Lead Arranger
November 2025
Leveraged Buyout
Documentation Agent
November 2025
Add-on Acquisition
Joint Lead Arranger
October 2025
Facility Upsize
Documentation Agent
October 2025
Get to know our investment team
The Direct Lending team is comprised of seasoned lending professionals, many of whom have worked together for more than 20 years. We have extensive experience across originations, underwriting, and portfolio management, with significant credit investing experience across all major industries and through multiple credit cycles.
Strong industry track record: Average of over 20 years of credit investing experience among senior investment team.
Diverse origination capabilities: Dedicated coverage of more than 400 private equity firms, plus non-sponsored loan origination direct with borrowers and various intermediaries, through advisors and the global Principal client network.
Stable capital base: Stable and committed capital base from Principal’s balance sheet, as well as dedicated outside capital, offering a multiplier effect to capital commitment levels.
Flexible offering: Ability to invest up and down the capital structure and credit spectrum with a variety of financing offerings and structures.
Expansive capabilities: Robust originations, underwriting, and portfolio staff comprised of seasoned credit investors with experience across industry verticals and debt securities.
Past performance does not guarantee future results.
Investment criteria/guidelines are subject to change.
Investments in private debt, including leveraged loans, middle market loans, and mezzanine debt, second liens, are subject to various risk factors, including credit risk, liquidity risk and interest rate risk.
Fixed‐income investment options are subject to interest rate risk, and their value will decline as interest rates rise.
Principal Alternative Credit is an investment team within Principal Global Investors.