Blackstone Inc.’s main private credit fund stormed the investment-grade bond market to raise a combined $1.5 billion in a single day, adding to the rush of direct lenders trying to lock in cheaper financing costs.

At a finance conference in London this summer, four senior investment bankers set about persuading the room that the $1.7-trillion private credit market isn’t a threat to Wall Street. Barely three months later, two of them have jumped ship to seek their fortunes in the upstart asset class.

Banks have found another way to fight back after private lenders have grabbed ever larger pieces of the lucrative business of financing leveraged buyouts.

Colm Kelleher whipped up a storm at the end of last year when the UBS Group AG chairman warned of a dangerous bubble in private credit.