By: Kevin Gehrke
Senior Product Manager
February 16, 2026
Managing the Operational Pressure Behind Private Credit Growth
Private credit strategies are expanding rapidly, driving higher loan volumes, more bespoke deal structures — and rising scrutiny from investors and regulators.
For growth firms in the sub-$5B AUM range, this acceleration creates both opportunity and operational pressures. The signs of strain are familiar. Teams struggle to meet reporting deadlines because of time-intensive manual cross-checks and validation workarounds. Firms rely on one or two key individuals who deeply understand how investments are tracked, resulting in bottlenecks and key person risk. This points to a deeper issue: systems and processes that no longer keep pace with the complexity and volume of modern private credit and debt portfolios.
In this environment, investment accounting becomes a critical point of control. Investment accounting, particularly in private credit, is the asset-level accounting function that manages loan activity, interest accruals, effective interest rate (EIR) amortization, valuations, cash and position accuracy, and the audit-ready subledger behind them. Distinct from fund accounting, it represents the core investment book of record (IBOR) for loans and other credit instruments — the place where every event and its financial impact are captured, with the results being posted to the general ledger.
As credit portfolios grow and strategies diversify, the robustness of this subledger and the controls around it become some of the biggest determinants of scalability, operational due diligence readiness, and investor confidence.
Where Traditional Tools Run Out of Road
For many early-stage private credit managers, spreadsheets or lightweight internal tools feel manageable, or outsourcing to a fund administrator makes sense. But as firms expand strategies or launch new funds, these approaches begin to show their limitations.
Spreadsheets and legacy systems break down because they were never built for:
- High volumes of loan events
- Commitment‑level amortization methods and multiple amortization schedules
- Multiple accruals with cash payments, PIK or both
- Frequent restructurings and amendments
- Multi‑currency portfolios
- Real-time oversight, drill-through, and reporting across entities
At the same time, fund administrators — while valuable partners for many managers — are often optimized for public credit or traditional fund accounting. Depending on which functions are outsourced, their timelines and levels of granularity may not always align with the day-to-day operational cadence required for direct lending and other private debt strategies. In those cases, managers can end up with a lagging or partial view of their positions and spend time sourcing data externally to respond to investor or internal requests.
This leaves many private credit managers weighing tradeoffs between internal tools that introduce operational and key-person risk, and outsourced workflows that may limit transparency or responsiveness for certain investment accounting functions. Neither approach provides the level of control, automation, and data quality required to support institutional-grade growth.
The Signals Your Accounting Infrastructure Is Falling Behind
While each firm’s path is unique, the warning signs are consistent. When speaking with COOs, controllers, and CFOs across private debt, the same themes recur.
AUM growth is accelerating faster than infrastructure.
New funds, more loans, and expanded strategies shouldn’t require a proportional rise in headcount. When they do, infrastructure is usually the constraint.
Loan complexity has exceeded what spreadsheets can handle.
Delayed-draw loans, unitranche structures, step-ups, and multi-currency revolvers introduce logic that generalist tools can’t reliably support at scale.
Manual workarounds are creating operational and audit risk.
What once felt manageable becomes a source of errors, breaks, or mis-stated positions as volumes rise. Patchwork processes are increasingly hard to explain during operational due diligence.
The firm needs stronger control and auditability.
Investors and regulators are asking tougher questions, and auditors expect consistent, accurate accounting and clear evidence of controls — something generalist systems and spreadsheets struggle to produce.
Reporting timelines are slipping.
Slow or manual daily reconciliations cascade into longer month-end cycles, valuation delays, and increased pressure on teams to meet board and investor reporting deadlines.
Key‑person dependency is growing.
Reliance on a single individual to interpret and apply agent notices consistently or reconcile complex loans exposes the firm to operational risk and makes succession planning more difficult.
Service provider timelines are slowing down decision‑making.
As strategies evolve, many firms find they need more transparency and more control than a fully outsourced model can provide, particularly when they need to run ad-hoc queries of their data or perform intraday oversight.
When these signals appear together, they are strong indicators that the current investment accounting infrastructure is no longer fit for purpose.
What ‘Enterprise‑Level’ Really Means in Private Credit
In private credit, “enterprise-level” investment accounting is not about firm size — it’s about operational maturity. Industry bodies and investors increasingly focus on whether managers have the systems, controls, and oversight needed to withstand institutional scrutiny.
Let’s examine what that looks like in practice.
Purpose‑built loan accounting.
Systems designed for loans 20 years ago or adapted from bond solutions require workarounds to support today’s private debt deals. A credit-focused subledger eliminates these gaps by supporting restructurings, rollovers, paydowns, commitment changes, fees, and amortization of Original Issue Discount (OID) with audit-ready accuracy.
Accuracy, control, and audit readiness.
Daily reconciliations, dual verification, and structured oversight reduce operational and reputational risk. Repeatable processes and proper segregation of duties make operational due diligence conversations significantly easier.
Data ownership and transparency.
Owning the subledger means owning the data — in real time, without dependency on downstream reporting. Firms can drill from portfolio views down to loan- and transaction-level records, with a clear trail of notices and calculations.
Configurable reporting and API‑driven integration.
A modern accounting foundation integrates seamlessly with general ledgers, data warehouses, performance and risk systems, and front-office platforms. It supports multi-entity, multi-currency reporting and reduces the need for manual extracts or spreadsheet stitching.
Scalability without a linear rise in headcount.
Automation absorbs repetitive work — such as processing standard loan events and importing base rates — allowing teams to focus on oversight, analysis, and exception management. The result is a controlled, scalable operating model rather than a hero-driven one.
Extending Your Operating Model and Operational Capacity
Many firms eventually want the best of both worlds: ownership of their system and the ability to scale operations without continuously adding staff. For firms that value the expertise and scale offered by service providers but want to retain ownership of their investment accounting data and controls, co-sourcing or managed services can offer a practical middle ground.
With both models, the service provider’s team works directly inside the fund manager’s accounting environment. This allows managers to maintain full transparency and control while expanding capacity for daily processing, cash and position reconciliations, break resolution, and other critical workflows.
The result isn’t a traditional outsourcing arrangement; it’s operational extension. It gives private credit managers the ability to run institutional-grade books and records with the level of timeliness, control, and documentation that investors and regulators increasingly expect, without overstretching internal capacities.
Building a Scalable Foundation for the Next Stage of Growth
As private credit matures and evolves, investors increasingly look for managers who demonstrate strong controls, transparency, reliable reporting, and operational resilience. These attributes are now core to what it means to be an institutional-grade manager.
Enterprise-level investment accounting provides that foundation. It helps COOs, finance leaders, and their teams scale the business, reduce risk, and meet rising expectations — even as portfolios and structures become more complex.
If your firm is experiencing any of the signals described above, now is the moment to strengthen your accounting infrastructure before growth amplifies the gaps.
Allvue Investment Accounting: A Purpose-Built Foundation for Private Credit
Allvue Investment Accounting is designed specifically for the operational realities of private credit and private debt. It provides a credit-focused subledger that supports the full spectrum of loan activity — from restructurings and delayed draws to multi-currency accruals, EIR amortization, and complex principal behavior. With proper accounting checks and real-time validation on every transaction, daily cash and position reconciliation, complete audit trails, and API-driven integration, it gives firms the accuracy, transparency, and control they need to operate at institutional scale.
For teams looking to extend their operational capacity, Allvue’s Managed Services offering adds experienced private credit asset servicing specialists who work directly inside the client’s environment, helping firms scale without sacrificing oversight. Together, the platform and service model provide private credit managers with a modern, dependable accounting foundation for their next stages of growth.
Ready to Build an Accounting Function That Scales with You?
Learn how Allvue Investment Accounting can help your firm gain accuracy, control, and operational resilience for the next phase of growth.
More About The Author
Kevin Gehrke
Senior Product Manager
Kevin Gehrke is an accomplished product leader with over 25 years of expertise in product management and software development, specializing in delivering innovative solutions for public and private credit workflows. As Senior Product Manager at Allvue Systems, Kevin drives the development and strategic vision of the Investment Accounting platform, tackling the complexities of private credit and debt processes with precision. His leadership ensures not only robust solutions for today’s challenges but also a forward-looking foundation for continued innovation in the industry.
