Direct Lending Strategies Face Slowest Fundraising in Three Years
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 22 2026
0mins
Source: seekingalpha
- Fundraising Slowdown: According to data from With Intelligence by S&P Global, direct lending strategies experienced their slowest fundraising activity in at least three years during Q1, with final closes totaling $10.7 billion, approximately 63% below the quarterly average of $28.7 billion from 2023 to 2025.
- Market Volatility Impact: The report highlights that several funds have delayed their first or final closes recently due to market volatility stemming from concerns over the Middle East conflict, indicating how geopolitical risks are directly affecting the private credit market and increasing uncertainty among investors.
- Total Private Debt Fundraising: Despite the slowdown in direct lending, a total of $49.9 billion in private debt fundraising was tracked in Q1 by With Intelligence, demonstrating relative resilience in other private debt strategies and potentially offering investors diversified options amid a challenging environment.
- Key Fund Overview: In light of the fundraising slowdown, notable direct lending funds such as MSDL, NCDL, OBDC, and SAR are under scrutiny, with investors needing to closely monitor their subsequent developments and potential impacts on the market.
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Analyst Views on SAR
Wall Street analysts forecast SAR stock price to rise
2 Analyst Rating
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 22.300
Low
23.00
Averages
24.00
High
25.00
Current: 22.300
Low
23.00
Averages
24.00
High
25.00
About SAR
Saratoga Investment Corp. is a specialty finance company that provides customized financing solutions to United States middle-market businesses. The Company invests primarily in senior and unitranche leveraged loans and mezzanine debt, and, to a lesser extent, equity to provide financing for change of ownership transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and financial sponsors. Its investment’s objective is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from its debt and equity investments. The Company’s portfolio is comprised primarily of investments in leveraged loans issued by middle-market companies. It also invests in mezzanine debt and makes equity investments in middle-market companies. The Company’s investment activities are externally managed and advised by Saratoga Investment Advisors, LLC.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Saratoga Investment Corp. Q4 Fiscal 2026 Earnings Highlights
- Return on Equity Performance: Saratoga Investment Corp. reported a 9.1% return on equity this quarter, demonstrating resilience and stability in its core BDC portfolio amidst a volatile macro environment, which is crucial for maintaining investor confidence.
- Stable Dividend Policy: The company announced a base dividend of $0.25 per share for Q1 of fiscal 2027, representing a 12.6% annualized yield, reflecting a strong commitment to shareholders while providing a reliable cash flow stream for investors.
- Portfolio Dynamics: The total portfolio stood at $1.109 billion, down 1% from the previous quarter, primarily due to dividend payments exceeding GAAP NII, highlighting the challenges the company faces in balancing profit distribution with capital retention.
- Increased Market Competition: Management noted that market dynamics are becoming increasingly competitive, with declining short-term interest rates and tightening spreads pressuring earnings, indicating a need for careful evaluation of investment opportunities in a changing market landscape.
See More
Direct Lending Strategies Face Slowest Fundraising in Three Years
- Fundraising Slowdown: According to data from With Intelligence by S&P Global, direct lending strategies experienced their slowest fundraising activity in at least three years during Q1, with final closes totaling $10.7 billion, approximately 63% below the quarterly average of $28.7 billion from 2023 to 2025.
- Market Volatility Impact: The report highlights that several funds have delayed their first or final closes recently due to market volatility stemming from concerns over the Middle East conflict, indicating how geopolitical risks are directly affecting the private credit market and increasing uncertainty among investors.
- Total Private Debt Fundraising: Despite the slowdown in direct lending, a total of $49.9 billion in private debt fundraising was tracked in Q1 by With Intelligence, demonstrating relative resilience in other private debt strategies and potentially offering investors diversified options amid a challenging environment.
- Key Fund Overview: In light of the fundraising slowdown, notable direct lending funds such as MSDL, NCDL, OBDC, and SAR are under scrutiny, with investors needing to closely monitor their subsequent developments and potential impacts on the market.
See More
Analysis of SAR Dividend Expectations and Market Performance
- Dividend Yield Expectation: SAR's current estimated annualized dividend yield stands at 13.29%, and while dividends are not always predictable, historical data aids in assessing the reasonableness of future yields, thereby influencing investor decisions.
- Price Fluctuation Range: SAR's 52-week low is $20.78 per share, with a high of $25.64, and the latest trade at $22.55 indicates price volatility within this range, which may affect investor confidence and market sentiment.
- ETF Holding Proportion: According to ETF Finder, SAR constitutes 1.62% of the Virtus Private Credit Strategy ETF (Symbol: VPC), which is trading up about 0.7% on the day, highlighting SAR's significance within the ETF and its impact on the overall investment portfolio.
- Market Performance: In Monday trading, shares of Saratoga Investment Corp are up approximately 2.4%, reflecting positive market sentiment towards the company, which may attract more investors to its dividend-paying capabilities and future growth potential.
See More
Saratoga Investment Declares $0.25 Monthly Dividend
- Stable Monthly Dividend: Saratoga Investment has declared a monthly dividend of $0.25 per share, maintaining the previous level, which reflects the company's stability and commitment to returning value to shareholders in the current economic climate.
- Attractive Yield for Investors: The forward yield of 13.7% not only provides investors with substantial cash flow but also has the potential to attract more investors seeking high-yield opportunities in the market.
- Shareholder Record and Ex-Dividend Dates: The dividend will be payable on April 23, with a record date of April 7 and an ex-dividend date also on April 7, followed by additional payments on May 21 and June 23, ensuring timely returns for shareholders.
- Debt Financing Initiative: Saratoga Investment is also planning to issue $100 million in 7.50% unsecured notes due in 2031, which is expected to provide additional funding support and enhance the company's financial flexibility moving forward.
See More
Sareum Holdings Restarts SDC 1,801 Toxicology Study
- Toxicology Study Restart: Sareum Holdings PLC has restarted the phase two toxicology study for SDC 1,801 with a new CRO, demonstrating the company's strong commitment to advancing its research pipeline.
- Clinical Trial Preparedness: The company has completed the manufacture of a GMP batch of SDC 1,801, ready for clinical trials, indicating thorough preparedness for the next phase of drug development.
- Partnership Expansion: Sareum is actively seeking partnerships for SRA 737, supported by extended IP and an active IND in the US, enhancing its attractiveness to potential partners in the pharmaceutical industry.
- Innovation Progress: The collaboration with receptor.AI for CNS diseases is progressing well, with a second batch of compounds in synthesis, showcasing the company's ongoing innovation and expansion into new therapeutic areas.
See More
Updated Quant Ratings for Small-Cap Financial Stocks Post Earnings Season
- Top Rated Companies: Following the latest earnings season, both Saratoga Investment and AGF Management achieved a quant rating of 4.87, indicating strong fundamentals that are likely to attract more investor interest and potentially drive stock prices higher.
- Low Rated Companies: Coincheck Group N.V. received a quant rating of only 1.04, reflecting weak fundamentals that may lead to declining investor confidence and adversely affect its market performance.
- Market Trends: As the earnings season concludes, investors are shifting their focus to changes in quant ratings, which provide insights into company performance across valuation, growth, and profitability, potentially influencing future investment decisions.
- Industry Developments: Root plans to expand to all contiguous states by 2027, despite its current quant rating of 1.28, indicating that it faces volatility challenges in the rapidly growing auto insurtech sector.
See More
Saratoga Investment Corp. Q4 Fiscal 2026 Earnings Highlights
- Return on Equity Performance: Saratoga Investment Corp. reported a 9.1% return on equity this quarter, demonstrating resilience and stability in its core BDC portfolio amidst a volatile macro environment, which is crucial for maintaining investor confidence.
- Stable Dividend Policy: The company announced a base dividend of $0.25 per share for Q1 of fiscal 2027, representing a 12.6% annualized yield, reflecting a strong commitment to shareholders while providing a reliable cash flow stream for investors.
- Portfolio Dynamics: The total portfolio stood at $1.109 billion, down 1% from the previous quarter, primarily due to dividend payments exceeding GAAP NII, highlighting the challenges the company faces in balancing profit distribution with capital retention.
- Increased Market Competition: Management noted that market dynamics are becoming increasingly competitive, with declining short-term interest rates and tightening spreads pressuring earnings, indicating a need for careful evaluation of investment opportunities in a changing market landscape.
See More
Direct Lending Strategies Face Slowest Fundraising in Three Years
- Fundraising Slowdown: According to data from With Intelligence by S&P Global, direct lending strategies experienced their slowest fundraising activity in at least three years during Q1, with final closes totaling $10.7 billion, approximately 63% below the quarterly average of $28.7 billion from 2023 to 2025.
- Market Volatility Impact: The report highlights that several funds have delayed their first or final closes recently due to market volatility stemming from concerns over the Middle East conflict, indicating how geopolitical risks are directly affecting the private credit market and increasing uncertainty among investors.
- Total Private Debt Fundraising: Despite the slowdown in direct lending, a total of $49.9 billion in private debt fundraising was tracked in Q1 by With Intelligence, demonstrating relative resilience in other private debt strategies and potentially offering investors diversified options amid a challenging environment.
- Key Fund Overview: In light of the fundraising slowdown, notable direct lending funds such as MSDL, NCDL, OBDC, and SAR are under scrutiny, with investors needing to closely monitor their subsequent developments and potential impacts on the market.
See More
Analysis of SAR Dividend Expectations and Market Performance
- Dividend Yield Expectation: SAR's current estimated annualized dividend yield stands at 13.29%, and while dividends are not always predictable, historical data aids in assessing the reasonableness of future yields, thereby influencing investor decisions.
- Price Fluctuation Range: SAR's 52-week low is $20.78 per share, with a high of $25.64, and the latest trade at $22.55 indicates price volatility within this range, which may affect investor confidence and market sentiment.
- ETF Holding Proportion: According to ETF Finder, SAR constitutes 1.62% of the Virtus Private Credit Strategy ETF (Symbol: VPC), which is trading up about 0.7% on the day, highlighting SAR's significance within the ETF and its impact on the overall investment portfolio.
- Market Performance: In Monday trading, shares of Saratoga Investment Corp are up approximately 2.4%, reflecting positive market sentiment towards the company, which may attract more investors to its dividend-paying capabilities and future growth potential.
See More
Saratoga Investment Declares $0.25 Monthly Dividend
- Stable Monthly Dividend: Saratoga Investment has declared a monthly dividend of $0.25 per share, maintaining the previous level, which reflects the company's stability and commitment to returning value to shareholders in the current economic climate.
- Attractive Yield for Investors: The forward yield of 13.7% not only provides investors with substantial cash flow but also has the potential to attract more investors seeking high-yield opportunities in the market.
- Shareholder Record and Ex-Dividend Dates: The dividend will be payable on April 23, with a record date of April 7 and an ex-dividend date also on April 7, followed by additional payments on May 21 and June 23, ensuring timely returns for shareholders.
- Debt Financing Initiative: Saratoga Investment is also planning to issue $100 million in 7.50% unsecured notes due in 2031, which is expected to provide additional funding support and enhance the company's financial flexibility moving forward.
See More
Sareum Holdings Restarts SDC 1,801 Toxicology Study
- Toxicology Study Restart: Sareum Holdings PLC has restarted the phase two toxicology study for SDC 1,801 with a new CRO, demonstrating the company's strong commitment to advancing its research pipeline.
- Clinical Trial Preparedness: The company has completed the manufacture of a GMP batch of SDC 1,801, ready for clinical trials, indicating thorough preparedness for the next phase of drug development.
- Partnership Expansion: Sareum is actively seeking partnerships for SRA 737, supported by extended IP and an active IND in the US, enhancing its attractiveness to potential partners in the pharmaceutical industry.
- Innovation Progress: The collaboration with receptor.AI for CNS diseases is progressing well, with a second batch of compounds in synthesis, showcasing the company's ongoing innovation and expansion into new therapeutic areas.
See More
Updated Quant Ratings for Small-Cap Financial Stocks Post Earnings Season
- Top Rated Companies: Following the latest earnings season, both Saratoga Investment and AGF Management achieved a quant rating of 4.87, indicating strong fundamentals that are likely to attract more investor interest and potentially drive stock prices higher.
- Low Rated Companies: Coincheck Group N.V. received a quant rating of only 1.04, reflecting weak fundamentals that may lead to declining investor confidence and adversely affect its market performance.
- Market Trends: As the earnings season concludes, investors are shifting their focus to changes in quant ratings, which provide insights into company performance across valuation, growth, and profitability, potentially influencing future investment decisions.
- Industry Developments: Root plans to expand to all contiguous states by 2027, despite its current quant rating of 1.28, indicating that it faces volatility challenges in the rapidly growing auto insurtech sector.
See More
