We continue our special series this week with :
Myth #2: “Private credit is the next market bubble.”
The same notion that private credit is crowded drives the view that strong investor demand will lead to a burst market bubble.
It’s a myth that’s applied regularly to leverage loans. The universe of broadly syndicated loans is as large as that of high-yield bonds, so that must be a bad thing. But growth in loans is a classic result of demand by both issuers and investors, thanks to the benefits of the asset class.
Similarly, private credit has expanded from about $200 billion five or so years ago to the $800 billion – $1 trillion range today. This is just under its public credit counterparts.