Private credit – Feature


PRIVATE CREDIT: TIPPING POINT


With central banks about to start their first round of monetary tightening, is the easy money that has fuelled private credit’s expo- nential growth about to dry up? Mona Dohle takes a look.


What do Australian Waste Services, US technology firm Bus Patrol and, perhaps soon, Chelsea Football Club have in com- mon? Well, the first two are part-financed by some of the world’s largest private credit funds, while the latter is the centre of dis- cussions with private credit giant Oaktree Capital Management after Roman Abramovich’s assets were frozen. Two decades ago, unlisted mid-sized firms might have approached banks directly for funding. But in the aftermath of the global financial crisis, banks drastically reduced their lend- ing activities and so private lenders stepped in. The global pri- vate credit market is now worth $1.2trn (£900bn) and growth forecasts by 2026 range from $1.5trn (£1.1trn) by Moody’s and $2.69trn (£2trn) by Preqin.


April 2022 portfolio institutional roundtable: Fixed Income


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