Why private debt is booming everywhere
Global finance is undergoing a reallocation of capital that will shape the next decade. Traditional banks, constrained by stricter Basel III and IV rules introduced after the 2008 global financial crisis to strengthen capital buffers and curb excessive risk-taking, are less willing to hold risk-weighted assets. Meanwhile, public bond markets, once the workhorse for corporate finance, remain volatile in a higher-for-longer interest rate world. Companies still need money for growth, refinancing, and working capital, but the channels that historically met that demand have narrowed. Into this gap has stepped private credit.
The numbers are striking: globally, private credit has surged from $200 billion in 2009 to nearly $2 trillion in 2023 — a tenfold increase — and is forecast to surpass $2.3 trillion by 2027. In the U.S., this once-niche market has grown to approximately $1.7 trillion, already surpassing leveraged loans at $1.4 trillion and high-yield bonds at $1.3 trillion.
