Key Takeaways
- • Global private credit assets under management rose 17% year-on-year to $4.1tn in 2025, according to research from the Alternative Credit Council (ACC), as reported by Bloomberg.
- • The ACC argues that credit deterioration remains concentrated in specific sectors rather than across the wider market, and that negative investor sentiment has become disconnected from underlying conditions.
- • Roughly one-sixth of surveyed funds reported non-accrual rates above 5%, signaling pockets of genuine stress despite the broader picture.
- • Approximately 70% of lender takeovers are linked to transactions completed in 2021 and 2022, per Man Group's Kevin Marchetti, when low rates supported elevated acquisition valuations.
- • The average share of loans subject to significant amendments fell to 10.6% from 11.7% in 2024, while lenders are tightening covenants and spreads in response to AI-related disruption risk.
Summary
Global private credit assets under management increased 17% year-on-year to $4.1tn in 2025, according to research from the Alternative Credit Council (ACC) reported by Bloomberg. The industry body argues that signs of credit deterioration remain concentrated in specific sectors rather than spread across the wider market, and that negative investor sentiment has become disconnected from underlying market conditions. The argument comes despite rising concerns over borrower defaults, redemption pressures and the potential disruption of software businesses by artificial intelligence.
The report found that lenders are responding to potential AI-related risks by demanding stronger loan covenants and higher spreads and, in some cases, refusing to extend maturities for vulnerable borrowers. Michael Small, a partner at KKR, reportedly suggested that professional services businesses could face greater disruption from agentic AI than some software companies, where lenders have concentrated much of their attention.
The research nonetheless identified pockets of credit stress. Approximately one-sixth of surveyed funds reported non-accrual rates above 5%, meaning interest income is no longer being recognised on a share of their loans due to repayment concerns. Kevin Marchetti, chief investment officer and head of US direct lending at Man Group, reportedly said approximately 70% of lender takeovers were linked to transactions completed in 2021 and 2022, when low interest rates supported elevated acquisition valuations.
Other indicators showed improvement. The average proportion of loans subject to significant amendments, which include payment holidays, maturity extensions, covenant changes and payment-in-kind interest arrangements, declined to 10.6% from 11.7% in 2024.
The findings come as private credit managers face growing scrutiny over portfolio valuations and liquidity, particularly among business development companies experiencing elevated investor withdrawals.
The report found that lenders are responding to potential AI-related risks by demanding stronger loan covenants and higher spreads and, in some cases, refusing to extend maturities for vulnerable borrowers. Michael Small, a partner at KKR, reportedly suggested that professional services businesses could face greater disruption from agentic AI than some software companies, where lenders have concentrated much of their attention.
The research nonetheless identified pockets of credit stress. Approximately one-sixth of surveyed funds reported non-accrual rates above 5%, meaning interest income is no longer being recognised on a share of their loans due to repayment concerns. Kevin Marchetti, chief investment officer and head of US direct lending at Man Group, reportedly said approximately 70% of lender takeovers were linked to transactions completed in 2021 and 2022, when low interest rates supported elevated acquisition valuations.
Other indicators showed improvement. The average proportion of loans subject to significant amendments, which include payment holidays, maturity extensions, covenant changes and payment-in-kind interest arrangements, declined to 10.6% from 11.7% in 2024.
The findings come as private credit managers face growing scrutiny over portfolio valuations and liquidity, particularly among business development companies experiencing elevated investor withdrawals.
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