Private Credit Market Tops $3 Trillion as Capital Deployment Surges — Evening Brief – 06.06.25
The private credit market has officially surpassed $3 trillion in assets under management, with deployment accelerating sharply, according to the Financing the Economy 2024 report released by the Alternative Credit Council (ACC) and EY. The report highlights $333 billion in new investments over the past year—a 64% increase from 2022’s $203 billion—underscoring the sector’s momentum and growing prominence in global finance.
Notably, just 20% of the largest private credit managers now oversee nearly 80% of total capital volume, pointing to a growing concentration of market power among large players who are driving the bulk of deployment activity.
Direct corporate lending, including middle-market CLOs, remains the dominant strategy, representing 58% of credit assets. However, asset-based lending, real estate debt, and infrastructure credit have gained significant ground, now accounting for 40% of total AUM—reflecting a broader diversification within the asset class.
Geographic diversification is also underway, with managers identifying Europe and Asia Pacific as key growth areas amid continued bank retrenchment. Increasing regulatory clarity is expected to accelerate private credit adoption in these regions.
The report also notes rising interest from retail investors, particularly in the U.S., where evergreen private credit vehicles are becoming more prominent. Europe is expected to follow, contingent on clearer regulatory frameworks for retail participation.
Risk management remains central. While inflation and interest rate pressures are contributing to stress among borrowers, 74% of managers report growing EBITDA among portfolio companies, and 63% maintain loan-to-value ratios under 50%. The use of leverage remains conservative, with 51% of firms employing leverage between 0.1x and 1.5x, and 31% reporting no leverage use.
Transparency continues to differentiate leading managers: 74% of surveyed firms report portfolio data quarterly, and 24% do so monthly, with widespread reliance on third-party valuation services.
Looking ahead, refinancing activity is expected to be a key capital deployment driver, as debt maturities are staggered across the coming years. The report also flags infrastructure credit—particularly public energy and transportation projects—as an emerging area of opportunity for private credit funds.