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Private Debt/ credit is an asset defined by non-bank lending where the debt is not issued or traded on the public markets. Private credit can also be referred to as “direct lending” or “private lending”.
The private debt market has grown tenfold in the past decade with assets under management of funds primarily involved in direct lending surging to $412 billion at end-2020—spurred in part by investors’ search for higher yield.
Borrowers in this market tend to be smaller (averaging $30 million in EBITDA) and more highly leveraged than issuers in the broadly syndicated leveraged loan market—most are unrated.Asset managers—especially alternative asset managers—are central to the private debt market through their lending platforms.