direct lending vs. corporate banking

Direct lending has picked up in activity because of lending restrictions imposed on banks which has practically wiped out the bank debt market for middle market companies. That's where direct lending funds (and BDCs) have come in. For example, if you're doing a $500mm acquisition (and say need $250mm) of debt for it, you would have a tough time getting the debt through the traditional bank debt market nowadays. Hence you approach a direct lending fund / group. Say Ares, Carlyle's TCW direct lending, BlueBay, Hayfin, Intermediate Capital Group, etc.

Barclays corporate lending is a corporate banking team. The Macquarie team you noted competes with the direct lending groups mentioned above.

Thanks EngBanker! That's also what I understand about direct lending.

But to me, this is essentially the same as corporate banking / risk function, maybe sometimes leveraged finance (if it's a high yield loan?) in a large bank where you lend / arrange a loan to corporate or another PE (whoever needs the money). The direct lending fund just act as a bank, but rather than lending out of B/S as banks do, the fund lend out of the money they pooled from their LP.

Is my understanding correct?

Then, how do they make money? Is it the same way as corporate banking? by charging fees? But then that's not a really "investment", right?

What's the main difference between direct lending and credit fund?

I'm kind of interested in this field, but a bit confused. Is there any good reading on it? (i've read some papers on direct lending activities in general, but would be great to know how the fund works) What type of candidate would do they prefer? Then i would assume they would prefer people with credit background? i.e. corporate banking? But I also see most of the credit fund prefer people with leveraged finance background. And leveraged finance is very different to corporate banking in my mind....

If anyone could please clarify, that will be great!