September 11, 2023 05:00 AM
Graphic: Weaker growth threatens private credit
Private credit is playing an increasingly prominent role in institutional investors' portfolios. Higher interest rates have helped boost private credit loan returns because they largely come with floating rates. Based on recent comments from Fed Chairman Jerome Powell, rates are expected to continue to increase. But should the U.S. economy significantly weaken, middle-market loans, which make up most private credit portfolios, could be hurt.
Private credit fundraising by category (billions)
Cliffwater Direct Lending index: Senior-Only