Now, another corner of private markets is gaining momentum, private credit.

The rise of private credit began in the aftermath of the global financial crisis, as tighter regulations and a reduced risk appetite led traditional banks to scale back their lending and focus on easier to underwrite transactions. This created a financing gap, especially for mid-sized companies, that was filled by non-bank lenders. In doing so, investors gained access to assets that offered an illiquidity premium, diversifying portfolios with returns that outpaced traditional fixed income.

The chart below illustrates how capital raised by private debt funds has grown significantly over the past decade. While fundraising volumes moderated between 2022 and 2024, this trend is consistent with broader patterns seen across alternative asset classes, as higher interest rates and macroeconomic uncertainty led some investors to pause or rebalance their portfolios. However, the structural case for private credit remains strong and early data from Q1 2025 shows encouraging fundraising activity, suggesting a potential rebound as market conditions stabilize and demand for private lending solutions persists.

Since then, private credit strategies have expanded well beyond traditional direct lending, evolving into a broader set of specialized solutions tailored to different borrower needs. This diversification of products has been a major driver of the market’s growth, enabling lenders to serve a wider variety of companies and investment situations that traditional banks no longer cover.

One area that has grown significantly is asset-backed finance, where loans are secured by specific assets. This includes financing tied to consumer credit portfolios, fleet leasing businesses or even more specialized collateral such as intellectual property royalties and data centers. These structures allow lenders to target unique risk profiles and provide tailored capital solutions outside the scope of conventional bank lending.

Another fast-growing segment is opportunistic credit and special situations strategies. These funds focus on distressed debt, restructuring scenarios, or market dislocations where capital is scarce and traditional lenders are reluctant to participate. By stepping into these less competitive spaces, private credit managers can generate attractive risk-adjusted returns while supporting companies through complex transitions.

Finally, fund finance has emerged as one of the most innovative and fast-growing areas within private credit. Through subscription lines, private equity funds gain short-term financing backed by investor commitments, which enhances their ability to manage cash flows and complete deals efficiently. More recently, Net Asset Value (NAV) lending has allowed funds to borrow against the underlying portfolio of companies they hold. This provides long-term, non-dilutive financing options that can be used to support portfolio companies, fund add-on acquisitions, or manage liquidity during longer holding periods, a growing need as private companies remain private for extended durations.

As shown in the chart below, the NAV financing market has grown from a relatively small base to over $100 billion by 2022, reflecting how managers have increasingly adopted this tool. Looking ahead, the NAV financing market is projected to grow 7x between 2022 and 2030, from $100 billion to $700 billion, representing a c.28% CAGR, making it one of the fastest-growing segments within private credit. Additionally, other new fund finance tools are emerging and growing in adoption and popularity, including hybrid loans, continuation fund loans and bridging loans. Furthermore, fund finance providers are also starting to provide financing to GPs through Management company loans.

This expansion in strategies has gone hand in hand with a transformation in who can access private credit. Historically, the asset class was reserved for large institutional investors, pension funds, insurers, and sovereign wealth funds, due to its high entry barriers, complex structures, and long investment horizons.

But that landscape is evolving rapidly. Not only is the range of assets expanding, but also is the range of participants, as wealthy individuals and family offices begin to occupy a larger share of what was once a tightly held corner of the market. Key factors in this shift have been product innovation, technological advances and the lowering of investment minimums, which, in some cases, now start as low as $1,000.

This growing accessibility has turned private credit into one of the most dynamic areas of capital allocation today. Over the past three years, holdings by individual investors have increased 2.5 times, outpacing the growth of institutional capital by a wide margin. While individuals are playing a large role, insurance companies are also expanding rapidly, with private credit allocations growing at a 32% compound annual rate between 2021 and 2024.

Recent estimates suggest that wealth management clients now represent approximately 12% of private credit assets managed by the industry’s top firms. While most of this capital still comes from the wealthiest investors, the direction is clear, private credit is moving closer to the mainstream of wealth management. Oliver Wyman estimates that leading managers now oversee over $275 billion in private credit assets from wealthy clients, with total allocations from this group likely falling between $325 billion and $375 billion globally.

In conclusion, private credit has grown into one of the most dynamic segments of private markets, fueled by the development of specialized lending strategies and the entry of individual investors. No longer confined to institutional portfolios, it is rapidly becoming a mainstream component of modern wealth management. As innovation continues to broaden access and diversify investment solutions, private credit is poised to play an even larger role in global capital markets in the years ahead.