News Digest: Private credit lenders worry over downsides

June 15, 2023

News Digest:

Representatives of the global private credit industry met at the SuperReturn in Berlin and shared notes on whether the decade-long growth in this asset class resulting in a multi-billion dollar industry could slow down.

Global private markets fundraising slumped by 11% to $1.2 trillion in 2022, with real estate and PE suffering 23% and 15% declines respectively, but private credit witnessed a 2% rise, as per information shared by McKinsey, a published report said. Industry leaders gathered in Berlin held the view that post the rate hikes of the past 12 months, the resilience of private credit continues to be attractive, given the floating-rate loans.


However, the same rate hikes resulted in higher borrowing costs that put pressure on portfolio companies, they said. However, investors who funded weaker companies in the boom period could face a major test during the downturn, they added.


End Notes