PennantPark Investment Advisers assembled $745 million for a continuation vehicle that lets it hang onto certain mid‑market loans beyond the usual timetable. Pantheon served as lead buyer, with PGIM also taking part. Rakesh Jain, Pantheon's global head of private credit, said the structure brought in fresh cash that helped PennantPark repay part of its borrowings.
Per Jain, the vehicle carries roughly 100 loans, largely first‑lien, sourced from seven different PennantPark funds. Sectors represented include industrial services alongside business services, healthcare, and information technology, and he noted the former is "catching a nice tailwind in terms of revenue and earnings growth."
With dealmaking slower, lenders to private equity portfolio companies are holding assets longer. Most private credit loans mature in five to seven years, so managers are using continuation funds to extend ownership while still recycling capital back to investors. The trend is visible in secondaries, where credit secondary volumes reached $20.4 billion during the first half of 2026 - surpassing the total for all of last year, Evercore Inc. reports.
Manager‑led transactions, including those by Miami‑based PennantPark, reached $17 billion in the first half, nearly triple the same period in 2025. The backdrop is a private credit market that has swelled to more than $1.7 trillion.
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PennantPark says it has more than $10 billion in investable capital and lends to mid‑market companies, including private equity‑backed businesses with earnings between $10 million and $50 million. Founder Art Penn summed up the lender's mindset: "As a lender, we are focused on getting paid interest and principal," adding, "So flat earnings is okay for us, versus a private equity investor who usually needs growth and a nice exit to hit their return targets." For everyday investors, the signal is that continuation funds are becoming a go‑to tool for keeping steady loans on the books while still returning cash, a trend that can influence how yields and liquidity ripple through credit markets.
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