Home Real estate and private markets investment strategies Alternative credit direct lending

Real estate & private markets

Principal Alternative Credit Direct Lending

Our differentiated perspective gives investors an edge in harnessing attractive investment opportunities in lower middle market direct lending. We maintain deep visibility into this underserved market, allowing us to uncover distinctive opportunities.

Gain an advantage in lower and core middle market lending with Principal Alternative Credit

$3B+ Committed alongside our clients1

Feel aligned with us through our shared capital commitment.

60-year Heritage of private credit investing2

Rely on the expertise and experience of our dedicated direct lending team.

350+ Private equity firm coverage

Plus, non-sponsored loan origination direct with borrowers and intermediaries.

Benefit from our broad insights and experience

In-depth understanding of middle market dynamics

Leverage the depth of our insights into the middle market industry; senior team members average over 20 years of credit investment experience and we continue to expand and hire key professionals from varied backgrounds to bring fresh perspective.

Integrated investment process

With over 35 specialists, the team originates, leads, underwrites, and manages the entire direct lending investment process from entry to exit. Post investment, the team closely manages our direct lending portfolio supported by legal, compliance, and business development professionals.

Extensive resources and support

Clients benefit from the power, resources, and shared insights of the global Principal Asset Management platform.

Explore how we can help

Financing solutions

For private equity-backed and non-sponsored transactions: Investing in private debt transactions to support leveraged buyouts, refinancings, recapitalizations, and growth.

Investor relations

For investors: Offering investment opportunities within the direct lending market, an asset class that has historically delivered attractive risk-adjusted returns with low volatility.

Explore our featured direct lending strategy

Featured

Private Credit Direct Lending

Focused on providing attractive risk-adjusted returns through lower and core middle market direct lending in the U.S.

Sustainable investing approach

Our approach incorporates four foundational pillars of analysis, which are embedded throughout the investment process. We believe that by analyzing how traditional ESG factors inform each of the four pillars of sustainability, we will be able to appropriately identify key risk considerations and generate attractive risk-adjusted returns for clients while being mindful of the role we play as capital provider in enhancing corporate sustainability.

Business model

Diligence around business model sustainability, competitive positioning, the value a borrower provides to all stakeholders, and key ESG-related risk considerations impacting a credit profile.

Cash flows

Assessment of how a capital structure will be sustained over the life of a transaction, including investments required to support business and technology evolution.

Capital formation

Deep analysis of trends in capital formation for businesses and industries, heavily influenced by sustainability considerations.

Engagement

Using our role as capital provider to engage with borrowers and sponsors to encourage proactive action which enhances long-term sustainability.

Featured insights

1 As of 30 June 2025.

2 Experience includes investment management activities of predecessor firms beginning with the investment department of Principal Life Insurance Company.

Disclosure

Past performance does not guarantee future results.

Private credit involves an investment in non-publicly traded securities which are subject to illiquidity risk. Portfolios that invest in private credit may be leveraged and may engage in speculative investment practices that increase the risk of investment loss.

Fixed‐income investment options are subject to interest rate risk, and their value will decline as interest rates rise.

ESG integration is considered across all actively managed asset classes, with the approach determined by each investment group’s process. This information is specific to the strategies managed by the individuals providing this content and various investment teams across Principal may have differing views of this approach.

Principal Alternative Credit is an investment team within Principal Global Investors.