Sandra Lawson
Managing Director, Global Corporate Affairs
Today’s private credit opportunity
Key points
01.
A growing opportunity
Private credit is expanding as firms stay private for longer, public markets shift and bank lending evolves. Across the US, EU and UK, private firms generate $40T in revenue — creating a major financing opportunity for private credit.1
02.
Innovation is expanding investor access to private credit
Lower entry points, better liquidity and greater transparency are opening private credit to more investors. It can diversify portfolios, generate income, hedge inflation and provide access to an engine of growth often absent from traditional fixed income.
03.
Expanding access to help people invest better
BlackRock is expanding access to private credit through innovation, acquisitions and greater transparency — creating opportunities for private markets to sit alongside public securities in portfolios, while channeling capital to businesses and communities worldwide.
Introduction: The rapid growth of private markets
Private markets are rapidly expanding, with private equity, private credit and privately held assets in infrastructure and real estate projected to grow from $15T today to $23T by 2029.2 Once largely reserved for institutional investors, private assets are increasingly available to individual investors and retirement portfolios.
Private credit, a $2.1T asset class that we expect to more than double by 2030, is central to financing the middle-market firms that are key drivers of economic growth and job creation.3 For investors, private credit can diversification, income and resilience to portfolios.
The scale of the private credit opportunity
Private credit is being fueled by investors’ demand for diversification, shifts in public markets, borrowers’ desire for flexibility and an evolution in the bank lending landscape.
Once centered on middle-market firms — which account for a third of US GDP and employ 40 million people — it now also finances larger companies that are staying private for longer.4 The scale is significant: more than 44,000 private firms in the US, EU and UK generate $40T in revenues annually.5 Private credit funds are also arranging jumbo financings for large and even public companies.
Adding private credit to investment portfolios
High minimums and long lockups once made private assets the domain of institutional investors. Today, innovation is lowering barriers with lower entry points, greater liquidity and inclusion in retirement plans.
Private credit can offer steady cash flows, floating-rate exposures and diversification through illiquidity premiums and unique risk profiles. As transparency and liquidity improve, we see portfolios evolving from the classic 60/40 to a 50/30/20 mix – where private assets are a core allocation.
Unlocking private markets for our clients
For nearly four decades, BlackRock has worked to expand market access and innovate for investors. Today, we see private assets as core complements to public securities – filling a central role in modern portfolios.
With our acquisitions of HPS, GIP and Preqin, we are opening private markets to more investors, increasing transparency, and channeling capital to businesses and communities that are at the center of the economy.
Authors
BlackRock
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