Private credit has grown from a niche institutional asset class into a $2.6 trillion global market and a major source of corporate financing. Driven by post–Global Financial Crisis regulatory reform, bank retrenchment, and investor demand for income, it has become a central feature of modern capital markets and is increasingly reaching wealth management clients and sophisticated retail investors through semi-liquid funds, non-traded business development companies (BDCs), interval funds, and digital platforms.
As this transformation accelerates, understanding how private credit is structured, how fund design shapes investor outcomes, and what expanding retail access means has become essential for investment professionals.
At a Glance
- Explains how private credit has evolved into a major source of corporate financing and a central component of modern capital markets.
- Uses a capital markets ecosystem framework to show how private credit relates to private equity, bank lending, and public debt.
- Shows how fund structures shape liquidity, valuation, governance, and investor outcomes.
- Examines how retail access is transforming private credit through evergreen funds, interval funds, non-traded BDCs, tokenized vehicles, and digital platforms.
- Identifies structural risks including liquidity mismatch, valuation opacity, covenant erosion, and interconnected exposures.
- Provides a practical framework for evaluating private credit within diversified portfolios.
What This Report Is About
This report examines the structural evolution of private credit: from its origins as a post-financial-crisis lending alternative to its emergence as a major component of global capital markets. It explains how fund design, market structure, and expanding retail access influence liquidity, governance, valuation, and investment outcomes, and provides a practical framework for evaluating private credit in portfolios.
What Is Private Credit?
Private credit refers to privately negotiated lending outside public debt markets, where companies borrow directly from specialized investment funds and other non-bank lenders.
What Is Retailization?
Retailization expands private market investing beyond institutions through more accessible investment vehicles while introducing new considerations related to liquidity, valuation, governance, and investor suitability. The report highlights this trend.
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Who Should Read This Report?
It is designed for:
- Financial advisers and wealth managers
- Institutional investors and consultants
- Family offices and sophisticated investors
- Policymakers, regulators, and students of alternative investments
Its aim is to provide a practical framework for evaluating opportunities, understanding structural risks, and implementing private credit with discipline.
Why Has Private Credit Grown?
Private credit has expanded as regulation, bank retrenchment, and investor demand have shifted more lending outside traditional banks. The report explains how these forces have transformed private credit from a niche institutional lending strategy into one of the fastest-growing segments of global capital markets.
How Do Private Credit Products Work?
The report compares closed-end, evergreen, interval fund, non-traded BDC, and tokenized structures and explains why fund design may matter as much as the underlying loans.
How Should Practitioners Evaluate and Implement Private Credit?
The report provides a practical framework for assessing liquidity, valuation, governance, borrower quality, fund structure, portfolio role, and investor suitability.
What Does Retailization Change?
Retailization expands how investors access private credit through different fund structures, but it does not change the underlying characteristics of the loans or the associated investment risks. As access expands, suitability and product design become more important.
What You'll Learn
Readers will find:
- Comparative analysis of closed-end, evergreen, interval fund, BDC, and tokenized structures
- Global comparison of retail access frameworks across the United States, Europe, and Asia
- Practical guidance for evaluating liquidity, valuation, governance, and portfolio implementation
See Where Private Credit Fits
Start with the big picture. Before exploring private credit, see how capital flows through today's financial system.
The Capital Markets Ecosystem framework provides the context for understanding where private credit fits, how it interacts with banks and public markets, and why it has become an increasingly important source of corporate financing.
Exhibit 1. Capital Market Ecosystem — How Companies Finance and Investors Invest
Source: Adapted from Private Credit: Market Structure, Fund Design, and Retail Access, CFA Institute Research and Policy Center. Capital Markets Ecosystem framework developed with input from Dr. Wolfgang Bessler.
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