While asset managers work overtime to reassure investors private credit is still a solid bet, data from alternative investment platform iCapital shows private wealth investors have become hesitant about the sector.
In its Alternatives Decoded report for June 2026, iCapital revealed the flow of funds to private credit on the platform had shrunk over the past year, from 41% of all flows in the first quarter of 2025 to 18% in the first quarter of 2026. Most of that money seems to have been reallocated to private equity, which rose from 35% of fund flows to 51% over the same period.
“Private wealth clients shifted away from private credit and into private equity, infrastructure and hedge funds in late 2025 and early 2026,” iCapital researchers wrote. “Growth and inflation-protected strategies (infrastructure) are the clear share gainers on the iCapital platform.”
In addition, investors adjusted where within the broader private credit sector they allocated capital. The share of funds dedicated to distressed and opportunistic private credit investments fell from 17% in 2023 to just 3% in 2025. Last year, the overwhelming majority of private credit allocations were to direct lending investments, at 89%.
There has also been a modest uptick in allocations to real assets, increasing from 13% at the start of last year to 17% in the first quarter of 2026. Within the broader real assets sector, infrastructure is currently experiencing rising flows, at 58% in the first quarter of 2026, up from 51% at the end of 2025 and 46% in the first quarter of that year. Over the same time period, fund flows to real estate declined from 53% to 41%.
iCapital’s report also revealed that at year-end 2025, the composition of funds on its platform was roughly evenly split between open-end and closed-end structures, at 43% vs. 42%. That’s a significant change from just two years ago, when closed-end structures accounted for 50% of funds on the platform compared to 34% for open-end vehicles.