The Future of Private Credit: A Growth Engine for Investors and the Economy

Private Credit’s Rapid Ascent 

Private credit has transformed from a niche asset class into a $3 trillion global market. Since the 2008 financial crisis, nonbank lenders have steadily stepped in to fill the gap left by traditional banks. The result is a market projected to reach $3.5 trillion¹ by 2028, which would make it bigger than today’s entire U.S. high-yield bond and leveraged loan markets combined. In 2023 alone, private credit funds deployed approximately $2 trillion in capital—a growth ten times in size since 2009.¹ That expansion has proven structural, not cyclical. Even in periods of volatility and inflation, private credit has continued to thrive, driven by demand for speed, flexibility, and yield. 

A Superior Lending Option in a Changing Macro Environment 

Private credit’s initial surge was fueled by regulatory changes that constrained traditional bank lending.²
Today, its continued relevance is being driven by attractive total return prospects in a higher interest rate environment, the certainty provided in an uncertain market environment and an ongoing need for flexible sources of capital. In this context, private credit providers remain a superior option, offering not only speed and flexibility but also the relationship-driven approach borrowers increasingly value.  

Supporting the Middle Market and the Broader Economy 

Middle-market companies—typically defined as businesses with $10 million to $1 billion in revenue—form the backbone of the U.S. economy.³ These companies often fall into a financing gap: they are too big for small bank loans and too small or unrated for the public debt markets. Private credit fills that gap. 

 A 2023 EY report found that 70% of borrowers turn to private credit because they are “too small for bank syndication,” while 91% choose it for certainty and speed.⁴ Private credit’s ability to provide liquidity in times of stress, as seen in its birth during the 2008 recession and its thriving following the COVID-19 pandemic, has made it an essential part of the financial ecosystem. 

As middle-market companies continue to scale, innovate, and respond to shifting consumer demands, the need for flexible financing will only grow. Private credit’s role in enabling this growth story is increasingly viewed not just as transactional but transformational. It has become a vital engine of entrepreneurship, regional economic development, and job creation. 

Opportunities for Investors: Diversification, Yield, and the Insurance Advantage 

Investors are increasingly allocating capital to private credit for its combination of yield, diversification, and downside protection. Compared to public fixed-income instruments, private credit offers higher returns with a lower correlation to broader markets. Floating-rate structures also offer a built-in hedge against inflation.⁵

One of the most notable trends is the growing participation of insurance companies. These institutions are shifting significant capital into private credit, drawn by their ability to match long-term liabilities with steady, contractual income. For individual and institutional investors, partnering with or investing through insurers provides access to a more conservative, stable slice of the market. 

Private credit is no longer just for the largest institutions. Vehicles like interval funds, BDCs, and insurance-backed annuities offer a range of entry points. With yields at 15-year highs, the time to lock in long-term private credit exposure is now. 

Banks and Private Credit: Complementary Roles with Structural Differences 

Despite reports that banks are regaining ground in some areas of direct lending, private credit retains its structural advantages. Banks face strict capital requirements and regulatory oversight. Private lenders, backed by committed capital and deep experience in complex credit underwriting, can support a broader range of borrowers, offer flexible structures and faster execution. 

That said, the future is not one of competition alone—it’s collaboration. Banks and private credit funds increasingly co-lend or partner on transactions, combining relationship networks with agile capital. This blended model serves borrowers more effectively and ensures broader credit availability. 

A Permanent Fixture of the Financial Landscape 

Private credit is not a passing trend. Its structural advantages, resilience in volatile markets, and growing investor demand position it as a cornerstone of modern finance. It supports economic growth, offers differentiated returns, and continues to evolve through innovation and institutional partnerships. 

As capital markets become more complex and companies seek tailored, non-traditional financing, private credit will continue to expand its footprint. Its value proposition is clear: from supporting the middle market to delivering enhanced yield and portfolio resilience for investors.