Private Credit Strategies: Who Uses Them, Who Benefits, and Why

Private credit has become a major source of financing for companies as banks have pulled back from parts of the lending market, and the asset class now plays a larger role in private portfolios.

With an estimated market size of about $2.7 trillion, it offers investors access to strategies such as direct lending, asset-based finance, distressed debt, mezzanine lending, special situations and venture debt.

These approaches can provide attractive income potential and diversification, but they also come with meaningful risks tied to credit quality, liquidity and economic conditions.

For advisors and investors, the opportunity lies in matching each strategy’s risk-return profile with portfolio goals while staying mindful that private credit outcomes can change quickly as markets evolve.