The $1.2 trillion private credit industry is largely financed by private commingled investment vehicles including open- or closed-end private credit funds, separately managed accounts (SMA), and business development companies (BDC). According to investment data company Preqin, approximately $910 billion of private credit assets under management (AUM) were attributable to investments made by private credit asset managers, along with an additional $391 billion of available dry powder as of March 2022.
Considering recent macroeconomic headwinds, the private credit industry is likely entering the most significant period of credit stress it has experienced since becoming an integral part of the U.S. and European corporate lending landscape. KBRA recently published research about the private credit industry and also reported on stress testing of private…