Direct lenders are positioning themselves to take advantage of a general slowdown of the U.S., that could lead to a pullback in syndicated loans and hamper banks' ability to lend capital.

That's according to a report from Reuters citing data from Preqin, which reported that private sect funds raised $110 billion in 2018 and $129 billion in 2017. This year, even when the leveraged loan business has shrunk, investors are expected to allocate more than $100 billion to private credit funds.

“A lot of capital formation has been done, especially since 2008, in the private credit space. In many ways, those pools of capital, and we can pick our BDC, are looking forward to that volatility,” said Dan Pietrzak, co-head of private credit at KKR & Co.

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