Except It Lacks Transparency, Liquidity & Is About To Be Stress Tested
History
Private credit was born from the ashes of the Great Financial Crisis. In the aftermath of that debacle, regulators moved to limit the risks banks could take. Loans deemed too risky were no longer being originated by commercial banks. To fill that void, non-bank lenders stepped in, creating what is known as private debt or direct lending market. You may know these vehicles as Private credit funds, also referred to as business development companies (BDCs). These funds raised capital from pensions, endowments, insurance companies, and wealthy individuals.
Unlike junk bonds or corporate bonds, these loans are not...
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