Direct Lenders Raise Billions as Liquidity Woes Hit Wall Street

Direct lenders on Wall Street are raising record amounts of capital to take advantage of a liquidity squeeze that is expected to hit private equity-owned companies that borrowed heavily in the easy-money era.

With corporate distress and banking turmoil on the rise, HPS Investment Partners, Goldman Sachs Group Inc.’s asset management division and Blackstone Inc. have raised over $40 billion combined in recent months to dish out loans to firms that are facing an uphill battle to refinance existing debt or obtain new loans.

They’re among a growing pack of private lenders making a big bet on mezzanine ...