The Year Ahead 2023
Private Credit Muscles Out Banks, With Worrisome Consequences
The opaque $1.4 trillion industry has become a magnet for high-flying finance executives and a hunting ground for asset managers.
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War, inflation and recession fears proved to be devastating for financial markets in 2022. Yet in private credit—one of the most opaque corners of Wall Street, where small groups of institutions and financiers make loans directly to companies—the picture has never looked brighter.
Private credit has grown quickly, hitting $1.4 trillion of assets under management globally at the end of 2022, up from about $500 billion in 2015, putting it on par with the US junk bond market. Research firm Preqin expects private credit to grow to $2.3 trillion by 2027.