The Growth of Private Credit: A Story of Momentum, Innovation, and Risk

A Market on the Rise

Private credit has moved from the margins of finance to the mainstream, becoming one of the fastest-growing asset classes globally. Over the past decade, assets under management have increased at an annualised rate of more than 14%, reaching nearly $2 trillion by the end of 2023. In the United States, the market now exceeds $1.3 trillion, compared with just $46 billion at the start of the century. Forecasts suggest it could expand further to between $2.6 trillion and $3 trillion by 2028. This dramatic growth reflects its increasing role in financing businesses and diversifying portfolios.

Drivers of Expansion

One major driver has been the retreat of banks from higher-risk corporate lending following post-crisis regulations. Private credit funds have stepped in to provide capital where traditional lenders have pulled back, particularly in leveraged loans and mid-market transactions. For capital providers, the appeal lies in higher and more stable yields compared with public markets, as well as diversification benefits. On the demand side, innovations such as evergreen fund structures have made private credit more accessible to a wider range of investors, including those seeking flexibility and lower minimum commitments.

Record Fundraising and Inflows

Capital raising has surged in tandem with demand for alternative sources of yield. The first half of 2025 alone saw inflows into private credit surpass the full-year total for 2023, with fundraising volumes on track to exceed 2024’s record levels. Multi-billion-dollar vehicles have become the norm, a reflection of how private credit has matured into a well-established component of the alternative investment landscape.

Regional Growth Beyond the U.S.

While the U.S. remains the largest market, private credit in Europe has expanded significantly. By late 2024, European assets under management exceeded $470 billion, compared with less than $40 billion two decades earlier. Private credit has become a critical financing tool for private equity deals, with a growing share of acquisitions relying on it. Europe has also seen rapid adoption of evergreen fund structures, with assets in these products doubling in just one year to reach €24 billion.

Risks and Concerns

The sector’s rapid expansion has prompted caution from regulators and industry leaders. Concerns focus on limited transparency, rising leverage, and looser underwriting standards, all of which could amplify vulnerabilities in times of market stress. The Federal Reserve and other authorities have noted that while private credit fills an important role, its scale and opacity mean it must be closely monitored to avoid systemic risks.

Looking Ahead

Private credit is expected to continue its upward trajectory in the coming years, fuelled by institutional appetite for yield and growing interest from a broader investor base. For fund managers, the opportunity is significant, but so is the responsibility to maintain discipline, ensure robust reporting, and build trust through transparency. The future of the asset class will depend not only on capturing capital flows but also on demonstrating resilience and governance in a rapidly evolving market.

How Untap Supports the Future of Private Credit

As private credit grows in both size and complexity, so too does the need for robust data management and transparent reporting. Untap provides fund managers with a single source of truth across portfolios, automating KPI collection, performance tracking, and valuation processes. Its reporting workflows reduce preparation time by up to 90%, ensuring investor reports are timely, accurate, and tailored. By linking fund metrics, asset-level performance, and value creation initiatives, Untap enables managers to tell a clearer story and build confidence with stakeholders. In a market where trust and transparency are essential, Untap equips private credit managers with the tools to scale responsibly and deliver lasting value.