Private credit has “transformed both investor portfolios and global financial markets”, but future growth “hinges on efforts to improve transparency for investors” and provide “standardised performance benchmarks”, according to a new report.
“Private equity and, more recently, private credit have transformed both investor portfolios and global financial markets. The ever-evolving offerings from the asset classes have attracted more investors, while the valuation of private companies has grown exponentially,” the report by S&P Global and Vanguard found.
Credit assets under management of the five largest private credit managers more than doubled between 2020 and 2025, reaching $2tn (£1.47tn), the report said.
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“In the third quarter of 2020, the five largest private credit managers — Apollo Global Management Inc., Blackstone Inc., Ares Management Corp., KKR & Co. Inc. and The Carlyle Group — had almost $750bnin credit AUM. This had grown by 174 per cent to more than $2tn by the third quarter of 2025.
“S&P Global Market Intelligence’s Quantitative Research & Solutions group projects the credit AUM of these firms will top $3.3tn by the third quarter of 2029”.
“This projects a compound adjusted growth rate of 15 per cent for private credit between 2023 and 2029. In earnings calls, many alternative asset managers are citing even higher expectations for growth of asset-based finance (ABF) within their credit portfolios.”
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However, the report concluded that “further growth hinges on efforts to improve transparency for investors, to provide standardised performance benchmarks to ensure private market allocations meet long-term objectives and risk budgets”.
“Investors have been willing to accept illiquidity, new complexities and limited transparency in exchange for the expectation of higher risk-adjusted returns and diversification benefits…this is quickly changing.
“Investors are increasingly seeking objective benchmarks, standardized reporting and tools that support clear and consistent analysis, attributes long associated with public markets and sound risk management practices”.
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The report found that asset-based finance (ABF) has emerged in recent years as one of the fastest-growing credit strategies within private credit portfolios.
“We expect ABF to surpass $1tn in AUM in the portfolios of the five largest private credit managers in 2029,” S&P said. “Considering the five largest private credit managers again, we see that ABF is poised for growth within the broader credit portfolios.”
