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Private credit
Private credit cracks trigger investor alarm
While cracks have been emerging within the US$2 trillion private credit (PC) market for some time, investor and regulator "alarm bells" are now flashing red following revelations that a growing number of funds are limiting the amount of capital investors can withdraw at once. Due to deteriorating credit quality, liquidity "gating", and opaque valuation practices, PC funds have been making investors nervous for some time. Since high-profile defaults started to surface last year, including last September’s bankruptcy of subprime auto lender, Tricolor Holdings and First Brands Group - with $10 billion in debt - Goldman Sachs, UBS, and JPMorgan Chase have expressed concerns about the underwriting quality in private credit. What’s also fanning investor angst about the sector are Fitch Ratings’ revelations that default rates in private credit hit a record 9.2% in 2025, up from 8.1% in 2024.Risks are spreadingHere in Australia, the Reserve Bank (RBA) joined a growing chorus of sceptics towards the sector when it warned investors the vulnerabilities of the United States and United Kingdom private credit markets could spill over into Australia. It’s understood that banks reported more than $1 billion write-downs from their dire
Private credit
Blackstone fund loss signals credit market stress
Blackstone’s flagship private credit fund has recorded its first monthly loss in more than three years, as rising investor withdrawals and mounting concerns over liquidity strain a fast-growing corner of global finance. The US$82 billion Blackstone Private Credit Fund, known as BCRED, fell 0.4% in February, its first negative return since September 2022, according to fund disclosures published on its website. The loss comes amid a broader deterioration in credit markets and intensifying scrutiny of private lending structures that expanded rapidly during the low-interest-rate era. The setback underscores growing stress across the $1.8 trillion private credit sector, where weaker borrower quality, concentrated exposure to sectors such as software, and limited transparency are testing investor confidence. Public market benchmarks have also softened: the Morningstar LSTA leveraged loan index declined 0.8% in February, reflecting wider pressure on leveraged borrowers. BCRED, which offers limited quarterly redemptions, faced elevated withdrawals in the first quarter, with investors pulling about $3.7 billion - significantly above typical levels. The surge in redemption requests mirrors a broader trend across private ma
Private credit
Run a ruler over private credit funds
With the share market potentially entering a period of heightened volatility, now is the time to consider rebalancing your portfolio and taking some of the profits you’ve made after the ASX200 delivered annualised total return of 10.63% over the past three years. Global equities have experienced one of its best bouts of performance in recent years, up 78.7% over the past three years, or over 20% on an annualised basis. Parking some of your profits in private credit funds — potentially paying attractive monthly returns — should be infinitely more attractive than sitting in cash. Staying in cash would be expensive exercise as you’ll get precious little on your money in return, while the share market is likely to keep going up. Alternatively, you could park some of your profits into a private credit fund paying between 7.5% and 9.5% per annum, paying cash monthly. Your opportunity cost is a lot lower because you’re still be getting the potential for a very attractive return while you’ve reduced your exposure to the share market. However, given that you’re always going to need growth, exiting the share market completely generally isn’t regarded as a good idea. Gap in lending market While banks have traditional
Private credit
Only fools rush in: Beware the private credit pile on
The spate of novelty-based super funds that came to market a few years back with little more than a catchy moniker was predicated on the realisation that enough crumbs were falling from big super’s table to warrant giving it a red hot crack. After all, the total flow of new money into super annually is huge, and for the year ending September 2025 was around $215.6 billion. When the market realised that these start-up funds had neither the all-important scale nor any real reason to exist – beyond raw opportunism – most of them collapsed within short order. Fast forward to 2025 and the same opportunism is now evident within the private credit market, where new players are piling on, much to the disdain of regulators who have become more vocal in their warnings to yield-seeking Aussie retail investors.ASIC sounds warningsHere in Australia, the regulator, the Australian Securities and Investments Commission (ASIC) has joined a growing chorus of regulators and analysts globally warning about poor quality private credit taking money off gullible mum and dad investors, while also undermining the broader financial system. As a case in point, the number of listed companies on the ASX and other global bourses has fallen in recen
Private credit
New flexible credit income fund targets Aussie investors
New York-headquartered Oakhill Advisers (OHA), the private markets platform of global asset manager T Rowe Price, plans to capitalise on secular tailwinds for private markets - and the challenges thrown up by an uncertain rate environment - by launching a flexible income fund offering Australian investors access to the US$2 trillion global private credit market. By combining OHA’s alternative credit investment expertise with T. Rowe Price’s established distribution network, the new fund – the Flexible Credit Income Fund AUD (OFLEX AUD) – is aiming to expand access for high-net-worth Australian investors to diversify their portfolios with high-quality alternative credit. The fund targets large-cap borrowers with similar financial characteristics to companies in the ASX200, offering exposure to offshore credit markets that can complement domestic holdings. Having historically been reserved for institutions, the Flexible Credit Income Fund AUD (OFLEX AUD) launch marks the first time OHA’s multi-strategy credit approach has been made directly available to Australian wealth clients. This new Australian unit trust is aiming to deliver income by lending primarily to large-cap companies across diverse industries, mainly in th

Private credit
Private credit sector told to lift its game
The Australian Securities and Investments Commission (ASIC) has called on the A$200 billion (US$132 billion) private credit industry to address worrying practices. Australia’s corporate regulator said it was concerned about opaque remuneration and fee structures, related party transactions and governance arrangements, valuation practices and inconsistent use of terms for effective disclosure. “Enhanced standards are needed to lift practices across the sector,” Chair Joe Longo said in a media release. ASIC was releasing its latest report on Australia’s public and private markets, Private Credit in Australia, by infrastructure investment executive Richard Timbs and former banker and chief risk officer Nigel Williams. “'While the report highlights some encouraging practices, it also reveals concerning behaviours that fall short of market expectations and more importantly that are inconsistent with existing financial services law,” Longo said. It comes only days after ASIC blocked $20 billion asset manager, Latrobe Financial Asset Management, from raising money through three fixed interest products. ASIC commissioned the review in response to the rapid growth of the sector in Australia, which in turn represents just
Private credit
Goldman, T. Rowe to offer alternative investments
Goldman Sachs and asset manager T. Rowe Price will begin offering alternative investment products to wealthy clients by the end of the year, with retirement accounts set to follow in 2026, executives told Reuters. The plan builds on a partnership announced earlier this month, under which Goldman will take a stake of up to US$1 billion in T. Rowe. Together, the firms aim to broaden access to private assets, including private credit and private equity, for retail investors. The initiative follows an executive order by President Donald Trump allowing 401(k) retirement accounts to include alternative investments. The order potentially opens access to roughly $9 trillion in retirement savings. T. Rowe Price, which manages $1.6 trillion - around $1 trillion of which is tied to retirement - will oversee the new products. Some products will take the form of target-date funds, which adjust allocations as clients approach retirement. These portfolios will carry a small allocation to alternative assets alongside traditional public and liquid investments, with the alternatives’ share reduced closer to maturity. Other products will cater exclusively to high-net-worth clients, offering diversified portfolios that mix privat
Private credit
Prime US borrowers show rising repayment stress
Financial stress is spreading to some of the most creditworthy United States consumers, according to new data from VantageScore, raising concerns that household finances are weakening more broadly. The credit scoring company reported on Monday that late repayments of more than 90 days surged 109% year-on-year among borrowers in the “superprime” category, those with the highest credit scores. Borrowers in the prime category, typically also considered financially secure, saw a 47% increase in late repayments over the same period. Rikard Bandebo, chief economist at VantageScore, told Reuters that while the absolute level of delinquencies remains relatively low, the trend is troubling. “Even though in absolute terms the increase is modest, it shows that even consumers considered the most credit-healthy are also beginning to see some stress with regard to repayments,” he said. The data also showed a rise in late-stage delinquencies across auto loans and mortgages, sectors where defaults usually occur only under significant financial strain. Early-stage delinquencies, defined as payments overdue by 30 to 59 days, are accelerating fastest in these secured loan categories. “Defaults on secured loans, such as mortgages, typi
Private credit
Asia emerges as growth hub for PE as funding gaps widen
The search for fresh opportunities outside of the more saturated markets of the United States and Europe has led global industry players to refocus on Asia-Pacific, now an emerging global hot-stop for private credit – aka non-bank lending. Since emerging as an investment buzzword three years ago, private credit has continued to garner traction as capital markets have evolved and higher traditional bank lending has widened funding gaps in the lending market. The latest data by PitchBook reveals that private credit assets under management (AUM) in Asia rose from virtually zero in 2000 to $62.3 billion in the first quarter of 2024. Data also reveals that the pace of that expansion has accelerated in recent years, with AUM more than doubling from $34.3 billion in 2017 to over $62 billion last year. According to Nicholas Cheng, head of the private markets group at Standard Chartered Global Private Bank, Asia is arguably emerging as a significant private credit growth hotbed. “The growing funding gap, rapid economic growth, increased sophistication of borrowers, and evolving regulations make it fertile ground,” he said. Due to evolving regulatory landscapes and global investors’ search for higher yields, more capital i