Private credit is set to be a “key financing channel” in 2026 and will grow at a high single-digit pace throughout the decade, Allianz Global Investors (Allianz GI) has said, dismissing rumours of “systemic risk” in the market.
In a 2026 outlook piece, Allianz GI stated that private credit and infrastructure are set to be “powerful drivers” of long-term value creation, financing the real economy, and enabling structural transformations such as deglobalisation, decarbonisation and digitalisation next year.
Overall, the firm stated that allocators are looking to expand beyond traditional buyout strategies to include infrastructure, private credit, trade finance and real assets. Each of these asset classes is expected to grow at a high single-digit pace through the decade.
“Private credit continues to evolve as a key financing channel,” said Sebastian Schroff, chief investment officer of private credit and private equity. “Success in private credit increasingly depends on disciplined underwriting and identifying resilient segments of the market, such as European and Asia private credit, secondaries, and other areas where structural demand and attractive risk-adjusted returns remain intact.”
Allianz GI has predicted that global private credit will grow to more than double its current size by 2030 to $4.5tn (£3.4tn) of assets under management, driven by higher interest rates and investor demand.
Allianz GI acknowledged recent problems in US non-bank lending that have cast a negative light on the private credit sector. However, the firm said it does not see “systemic risks” in the asset class.
Despite noting that credit spreads remain historically tight, Allianz GI said it continues to forecast strong growth in private credit, driven by higher interest rates and sustained investor demand.
Private markets have moved from being “merely alternative” to becoming “foundational” to long-term portfolio construction as investors ramp up their allocations, the asset manager stated.
Read more: Private markets to account for half of global asset management revenues by 2030
This shift towards alternatives has become visible among institutional allocators such as insurers over recent years. Nearly a third expect to increase their private-market allocations this year, with credit and infrastructure the main areas of interest, according to a recent BlackRock survey. BlackRock noted that the move towards private markets, particularly credit, reflects insurers’ efforts to manage volatility and position their portfolios for long-term competitiveness.
Pension funds, endowments and foundations are also boosting exposure to alternatives. Nearly a third of the latter two groups have introduced or expanded private-market programmes, according to new research from Mercer, with market volatility among their top macro-level concerns.
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