Key Takeaways
- • UK Finance opinion piece projects private credit assets under management will grow from about US$2 trillion today to US$3.4 trillion by 2030.
- • PwC's survey of more than 120 credit portfolio managers globally found more than 80% expect increased allocations over the next 12 months, and 44% expect allocations to rise by more than 20%.
- • The authors argue private credit is entering its first real test as a major asset class, with the gap between top managers and the rest set to widen.
- • Banks are described as simultaneously clients, competitors and partners of private credit funds, with asset-based finance cited as a key area of collaboration.
Summary
According to an opinion piece published by UK Finance, the private credit industry is expected to grow from about US$2 trillion in assets under management to US$3.4 trillion by 2030. The authors frame the market as being at a turning point, in which some players will scale while others stall. The article notes that the authors' views do not necessarily reflect those of UK Finance or its members.
Citing a PwC survey of more than 120 credit portfolio managers globally, the authors highlight strong investor sentiment, particularly in the UK. More than 80% of managers expect increased allocations over the next 12 months, and 44% expect allocations to rise by more than 20%. The authors attribute demand for the asset class to higher interest rates, tighter lending conditions and the search for yield, which have drawn substantial capital into private credit funds and spurred innovation across a wider range of sectors.
The authors acknowledge that the market faces pressure on defaults and growing competition. They describe this as a sign of maturity rather than weakness, arguing that the winners will be managers able to demonstrate disciplined underwriting, stronger portfolio management, credible restructuring capability and attractive risk-adjusted returns through the cycle. They also note that recent high-profile failures have reinforced the need for stronger governance, better visibility of risk and deeper diligence on structural risk in financings.
The article devotes considerable attention to the relationship between banks and private credit funds, which it describes as complex. Private credit funds compete with banks where borrowers prioritise speed, certainty and flexibility, partner with them on origination and structuring, and rely on them for financing, risk management and distribution. The authors argue banks should balance these roles by combining bank origination strengths with private credit capital. Asset-based finance is cited as one of the highest-growth areas for many funds, with banks structuring deals alongside credit funds. In the UK, banks and private credit funds are described as working together to fund non-bank lenders, with similar opportunities emerging across infrastructure, real estate, specialty finance and structured solutions.
Citing a PwC survey of more than 120 credit portfolio managers globally, the authors highlight strong investor sentiment, particularly in the UK. More than 80% of managers expect increased allocations over the next 12 months, and 44% expect allocations to rise by more than 20%. The authors attribute demand for the asset class to higher interest rates, tighter lending conditions and the search for yield, which have drawn substantial capital into private credit funds and spurred innovation across a wider range of sectors.
The authors acknowledge that the market faces pressure on defaults and growing competition. They describe this as a sign of maturity rather than weakness, arguing that the winners will be managers able to demonstrate disciplined underwriting, stronger portfolio management, credible restructuring capability and attractive risk-adjusted returns through the cycle. They also note that recent high-profile failures have reinforced the need for stronger governance, better visibility of risk and deeper diligence on structural risk in financings.
The article devotes considerable attention to the relationship between banks and private credit funds, which it describes as complex. Private credit funds compete with banks where borrowers prioritise speed, certainty and flexibility, partner with them on origination and structuring, and rely on them for financing, risk management and distribution. The authors argue banks should balance these roles by combining bank origination strengths with private credit capital. Asset-based finance is cited as one of the highest-growth areas for many funds, with banks structuring deals alongside credit funds. In the UK, banks and private credit funds are described as working together to fund non-bank lenders, with similar opportunities emerging across infrastructure, real estate, specialty finance and structured solutions.
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