Private Credit: A US$3 Trillion Asset Class

In a recent announcement, the global private credit market has reached a record US$3 trillion in assets under management (AuM), according to a new report from the Alternative Credit Council (ACC), the private credit affiliate of the Alternative Investment Management Association, and consulting firm EY.

In a statement regarding this significant milestone, Jiří Król, Global Head of the ACC remarked ‘’Surpassing $3tn in assets is a remarkable achievement for the private credit industry, especially in a challenging macro environment” (Alternative Credit Investor).

This achievement follows an extended period of subdued market performance in recent years, as highlighted in a recent JTC article, ‘Is Private Credit Poised For A Rebound?’ where Harold Patch, Senior Director – Fund Administration, emphasized the slump which the private credit market had experienced due to economic conditions, particularly noting the market’s decline after the COVID-19 pandemic induced surge in debt-financing needs.

Despite these challenges, private credit has experienced remarkable growth, emerging as the fastest-growing alternative asset class over the past two decades, according to EY.

As of April 2024, the US accounted for around three-quarters of the total market share (International Monetary Fund). Additionally, the ACC reports that roughly half of investors plan to increase their private credit allocations in North America over the next three years. These trends indicate that US managers are well-positioned to capitalize on the resurgence of private credit.

For a comprehensive analysis of the factors driving the current state and future potential of the private credit market, read JTC’s recent article, ‘Is Private Credit Poised For A Rebound?’, where Harold Patch provides an in-depth review on the landscape of private credit.