Hello and welcome to Private Credit Pulse by Financial Profiles, a weekly account of the latest industry news and views to help you stay current on the buzz in this dynamic space. This week, we’re hearing a lot about expectations for the market in 2025 and beyond, including growth projections and anticipated deal activity. Below are a few of these industry highlights from the week ending December 13, 2024.
Business Insider reports that private credit firms are becoming hot acquisition targets as M&A activity ramps up. According to PwC, firms with $30 billion to $70 billion in assets under management are likely to be bought in 2025. Asset managers are eager to expand into alternative assets to diversify their offerings and boost fee revenue, driven by expectations of dropping interest rates and light-touch regulators. Private equity firms are also using acquisitions to strengthen their private credit capabilities. Cultural and operational differences pose challenges to successful integration, but the trend is clear: private markets are the new focus, and firms must either acquire or be acquired to stay competitive.
Morningstar DBRS published its 2025 private credit rating outlook, covering recent rating actions and operating performance for the private credit sector and offering its forecast for credit ratings and trends in credit quality for the year ahead. The report highlights that while downgrades and defaults are expected to rise into 2025, the pace will be slower compared to this year. Fundamentals of higher-rated middle-market credits are improving, whereas lower-rated credits continue to face challenges. Until leveraged buyout activity picks up, corporate actions for middle-market borrowers will mostly reflect refinancings rather than mergers and acquisitions.
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P&I highlights a new Preqin report that forecasts a trough for private credit fundraising in 2025, but expects growth to pick up in 2026, with assets under management growing at a compound annual growth rate of 9.9% from the end of 2023 to 2029, when it will reach $2.64 trillion. This is lower than the 14% growth rate seen from 2012 to 2023. The report points to significant M&A activity, including BlackRock's acquisition of HPS, and other notable deals, as indicators of continued growth. According to Preqin, competition for assets remains a top concern for private credit managers, along with deal flow and geopolitical risk.
Private Credit’s Record CLO Issuance Is Raising Concerns
Private Credit Outlook: Pace of Downgrades May Slow in 2025
PitchBook Expands Lending League Tables to Include Private Credit
The Private Credit Firms Ripe for Acquisitions in 2025, According to PwC
Rockefeller’s Endowment Is Selling Some Private Credit Funds
Private credit is not just safe; it's vital to the US economy
Investors ‘don’t see doom’ but cracks are showing in private credit
What's on the horizon for private credit in 2025?
Private debt investors took defensive approach in 2024
Private credit collateralised loan obligations… an emerging trend in Europe?
2025 BDC Outlook: Protectionist Policies to Benefit Domestic Mid- Market Companies
Private credit forecast to reach $2.64 trillion in 2029 — Preqin
San Francisco slates $75 million for private credit
Investors looking to work with fewer private credit managers
Private Credit: Alcentra's Direct Lending Struggles Are Warning Sign for Market
The private credit boom is coming at the right time
Private Credit Tokenization Hits $650 Million Monthly, Setting A New Benchmark
Public and Private Credit Markets Grow Together at a Steady Pace
LPL, industry, sanguine about some alternatives in 2025
Competition to Pressure BDCs’ Deal Terms, Credit Performance in 2025
Blackstone, Ares Sign $1.4 Billion Private Credit Deal for Odevo
Apollo - Private Credit: An Enduring Opportunity in Dynamic Market Cycles
Private Credit Should Trade at Premium, Franklin’s Johnson Says
Guggenheim’s Walsh Sees Private Credit Doubling in Size
BlackRock's private markets push may not be over after 2024 buyout spree
US private credit firm Golub Capital to set up base in Abu Dhabi
BlackRock senior managing director Mark Wiedman sells $37.85m in stock
BlackRock COO Robert Goldstein sells over $56m in stock
S&P Downgrades Private Credit Fund Prospect Capital to Junk
UBS Australia - Private credit: The Red Thread – Private Markets
Singapore's Temasek unveils $7.5 billion private credit entity
iCapital to launch private credit interval fundLearn more about how Financial Partners can help you build your reputation and value by emailing us at privatecredit@finprofiles.com.
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