Institutional investors, which have traditionally made up private debt’s largest pool of money, are no longer a source of growth for the $1.7 trillion industry.
It’s the hottest trade on Wall Street. Everywhere you turn, money managers have upped their investments in private credit, helping the asset class balloon into a $1.7 trillion industry. But there’s one group where interest appears to already be waning — the family office.
First the private credit firms came for the banking industry’s lucrative corporate loan business. Now they’re grabbing a chunk of their consumer-lending work. The pressing question for this thriving multi-trillion dollar industry is whether it has timed its latest incursion badly.
The clubby world of private credit seems to be running out of space for the little guy.
As Pete Stavros addressed the private equity industry’s yearly shindig in Berlin last month, the KKR & Co. executive’s words were slightly less headline grabbing than those of Apollo Global Management’s co-president Scott Kleinman. But they were just as troubling.
Private credit investors in Europe are abandoning leveraged plays to try to get ahead of a potential wave of defaults.
The private equity industry must face up to the reality of lower valuations, according to Apollo Global Management Inc.’s Scott Kleinman.
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.
