Private Credit Market Trends, Share, Forecast 2024-2031
BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated Global Private Credit Market size by value at USD 1,080.57 billion in 2024. During the forecast period between 2025 and 2031, BlueWeave expects Global Private Credit Market size to boom at a robust CAGR of 18.5%, reaching a value of USD 3,545.54 billion by 2031. The Private Credit Market across the world is experiencing robust growth, driven by several key factors. The retrenchment of traditional banks from lending, particularly to small and medium-sized enterprises (SMEs), has created a financing gap that private credit funds have effectively filled, offering tailored solutions and faster execution. Additionally, investors are increasingly attracted to private credit for its potential to deliver higher yields compared to traditional fixed-income investments, especially in a low-interest-rate environment. Regulatory changes, such as stricter banking regulations post-2008 financial crisis, have further limited banks' lending capacities, enhancing the appeal of private credit as an alternative source of capital. Moreover, the flexibility and customization offered by private credit arrangements make them particularly attractive to borrowers seeking financing solutions that align with their specific needs. These combined factors are propelling the expansion of Global Private Credit Market.
Opportunity – Growing Adoption of Asset-based Financing
Global Private Credit Market is experiencing significant growth, driven by the increasing adoption of asset-based financing (ABF). The ABF approach, including lending secured by tangible assets, such as receivables, inventory, and real estate, offers enhanced security and predictable cash flows, appealing to both investors and borrowers. The expansion of ABF is evident as major private credit firms like Apollo, Blackstone, and KKR launch dedicated ABF strategies, aiming to tap into the estimated USD 20 trillion global ABF market. Additionally, partnerships between private lenders and banks facilitate access to high-quality deal flow, further propelling market growth. Institutional investors, including insurers and pension funds, are increasingly allocating capital to ABF due to its attractive risk-adjusted returns and diversification benefits. As banks continue to retreat from certain lending activities, ABF is poised to play a pivotal role in the evolving private credit landscape.
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Technology and Software Segment Holds a Larger Market Share
The technology and software segment holds the largest share of Global Private Credit Market, due to the sector's high growth potential, recurring revenue streams, and low capital intensity, which make it attractive to private credit investors. Investments in enterprise software and IT services, in particular, have become increasingly popular due to their scalability and resilience, even during economic downturns. Together, software and healthcare services companies represent over 20% of total exposure among private credit funds.
Impact of Escalating Geopolitical Tensions on Global Private Credit Market
Escalating geopolitical tensions are significantly impacting the growth of Global Private Credit Market by increasing uncertainty and risk aversion among investors. Such tensions often lead to capital outflows from emerging markets, tightening liquidity and raising borrowing costs. Financial institutions, particularly non-bank lenders, may face heightened credit risks due to potential disruptions in trade and supply chains, as well as increased default rates. Additionally, geopolitical instability can lead to market volatility, affecting asset prices and investor confidence. Consequently, private credit investors may become more cautious, potentially leading to a slowdown in deal-making and a shift towards more conservative lending practices.
Competitive Landscape
Global Private Credit Market is highly fragmented, with numerous players serving the market. Major companies dominating the market are Blackstone, Ares Management, Apollo Global Management, Sixth Street Partners, Golub Capital, HPS Investment Partners, KKR & Co. Inc., Carlyle Group, Oak Hill Advisors, Macquarie Capital, Churchill Asset Management, Neuberger Berman, Blue Owl Capital, Barings LLC, and Oaktree Capital Management. The key marketing strategies adopted by the players are facility expansion, product diversification, alliances, collaborations, partnerships, and acquisitions to expand their customer reach and gain a competitive edge over their competitors in Global Private Credit Market.
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