It’s clear that uncertainty around the global economic climate is going to be with us for a while yet. Unsurprisingly, therefore, many of those focused on the financial sector in particular are looking back to the last global financial shock and wondering what has changed since then as a clue to how the coming year will unfold.
One notable development over the period has been the establishment, and subsequent proliferation, of the private credit market. Having first gained a foothold in the sub-investment grade lending market as traditional bank lenders reduced their exposure in response to regulatory pressure following 2008, private credit has both accompanied that market through its exponential growth fuelled by low interest rates over the intervening period and, more recently, presented as an additional source of debt funding across a multitude of other product areas. By 2022, according to London-based data firm Preqin, global private credit assets under management had reached $1.5tn in 2022, a jump of more than 40% from 2020 alone.
