Private debt banner
Investment Strategies

Private debt

BlackRock has built industry-leading private debt capabilities over the past 20 years, seeking to deliver attractive results throughout market cycles. Our platform provides a whole portfolio approach to investing across the risk/return spectrum, leveraging our global scale to deliver investment solutions that meet our clients' needs.

Why invest in private debt?

There is increasing demand from borrowers for financing from alternatives sources, as banks pull back from lending and syndicated markets see ever larger deal sizes. At the same time, borrowers are increasingly choosing private debt for the benefits it can provide, even when financing is available from traditional sources.

Diversification icon
Opportunity to diversify sources of portfolio risk and return with low correlation to stocks and bonds
Trends arrow
Yield premiums
Offers reliable income with illiquidity premiums and long-term outperformance vs. public market bank loans and bonds
Momentum icon
Downside mitigation
Private lenders have greater say over terms and pricing and are better able to negotiate protective debt and performance covenants
Low volatility icon
Lower volatility
Private debt delivers reliable income and is less susceptible to market fluctuations

BRENT PATRY: Which areas of the credit market do you think provide the most attractive opportunities?

JAMES KEENAN: I actually think 2024 is going to be another really good year to deploy. I mean, first off, you have an economy that is softening, but you're still talking about a growth environment. You have a generally tight banking system. So, as you start to see more activity come in, I think you'll get really nice spreads per unit of risk. So, corporate direct lending remains attractive. Some of the bank deleveraging trades, risk transfers, real estate dispositions.

BRENT PATRY: When you think about the overall size of the private debt markets and the trajectory of growth, how do you think that is growing relative to other asset classes and other strategies within credit?

JAMES KEENAN: We see the market growing significantly over the next several years, but let's define that, right? You have a market right now that, because of the volatility and disruption in the banking system, you're going to see a shift in policy and even risk management around deposit flight. And what does that really mean? You're talking about trillions of assets coming out of the banking system, right, as you start to see more equity being needed in that. And if you think about the US banking system alone, that might be $2-3 trillion. And broadly speaking, globally, that's even going to increase. So, when we think about the market share shift to private debt, they're going to play a huge role in that opportunity. On top of that, because of the growth of the market, we see it as a good funding source relative to public markets. And then, third, just general GDP growth and earnings growth. We think that it will continue to grow the market. So, for those three reasons, we think we're fairly conservative when you think about the size of private debt and the opportunity for clients to continue to invest in that.

BRENT PATRY: Are there one or two key messages you'd like to give our clients about how we're positioning our portfolio or addressing the opportunity set?

JAMES KEENAN: Yeah, I think the last 12 to 18 months, some of the attractiveness about private debt for investors has been avoiding the risk of duration, right? And we certainly have seen that move and a little bit more of a stabilization of rates and where policy is going. I think, as you think about the next 12 months, it's still going to provide a really attractive opportunity. Because as you continue to see this mega shift, when the reduction of risk and assets off of the banking system, it's providing a huge pool of assets and even at a flat or inverted curve. You're talking about assets that are coming with really nice yields associated to in comparison to either the equity or the fixed income market in a growing market. So, I think that is really the risk or the return profile still looks really attractive in 2024.

Private debt viewpoints with James Keenan

Watch for the latest timely insights from the Global Head and Chief Investment Officer of our Private Debt business.

Our key differentiators

Diversification icon
Diversified, scaled platform with strong origination
Differentiated access to opportunities as a result of extensive relationships with corporate management teams, sponsors, banks and consultants.
Expert investment selection and structuring
200+ investment professionals globally, with cycle-tested experience in deployment, asset management and workouts, combining macro research with bottoms-up credit expertise.
Quality Diamond icon
Supported by the power of BlackRock’s platform
Leveraging technology solutions, risk management, and portfolio construction processes that support BlackRock’s more than $10tn AUM to make more informed investment decisions.
Performance icon
Ability to combine strategies to meet investor objectives
Build customized client solutions across the full private debt and liquid credit spectrum based on currency, fund structure and risk-return needs.

Awards and recognition

BlackRock has received three awards from Private Debt Investor in 2023.
Private debt global responsible investor 2023
Global Responsible Investor of the Year
Private debt responsible investor europe
Responsible Investor of the Year, Europe
Private debt infrastructure debt manager apac 2023
Infrastructure Debt Manager of the Year, Asia-Pacific
Paragraph-1,Multi Column Teaser-4
Paragraph-2,Video Player-2,Multi Column Teaser-5
Paragraph-3,Multi Column Teaser-6
Paragraph-4,Multi Column Teaser-7
Paragraph-5,Multi Column Teaser-8
Paragraph-6,Multi Column Teaser-9

Direct lending

Private loans to performing middle market companies

Why now?

  • Rapid deployment: Strong and growing borrower demand for non-bank financing allows for rapid and highly selective deployment
  • Income: Floating rate loans can deliver potentially higher income relative to similar public market debt in a rising interest rate environment
  • Structural protections: Senior secured loans with bilaterally-agreed terms can provide downside protection rarely offered in public markets

Why BlackRock?

Differentiated sourcing
Highly selective, multi-channel approach to investment sourcing
Superior risk management
Experienced teams with global and local market perspectives
Proven track record
Established investment history and track record


Capital solutions with complexity and illiquidity premiums

Why now?

  • Dynamic flexibility: All-weather strategies designed to capture the best risk-adjusted opportunities regardless of the market environment
  • Premium returns: Potential for equity-like returns with credit-level risk driven by predominantly income and some capital appreciation
  • Downside mitigation: Bilateral negotiation affords structure and pricing influence and robust credit documentation, including comprehensive covenants and other protections

What role can private debt play within a client’s broader portfolio?

So we think investors are increasingly focusing on the private debt market for a number of reasons. The first is diversification. It gives them exposure to underlying corporate credit exposures. And they can create customized portfolios based on the diversification that they seek. The second is yield premium. One of the benefits of private debt market is premiums relative to what you can achieve in broadly syndicated or traded markets, both across corporate credit and across the fixed income alternatives.

Third is, at the end of the day, based on some changes structurally in the traded credit markets, there's opportunity in private markets. That's largely a function of the ability to continue to negotiate for covenant protections, negotiate credit documentation for purposes and the private market that have largely disappeared in the public market.

So, in situations where you're concerned about cyclicality or potential capital impairment, you can get to the table. And for the last, I think that benefit with the higher yield is allowing investors to increasingly focus on private debt.

What trends are driving investors to allocate to private debt as a distinct asset class?

There's a number of factors that are driving what I would say is an expansion of the opportunity set, you know, the broadest level of supply, demand imbalances are being created as banks have pulled back as capital formation in the private market has grown. and I would say has increased competition has picked up a lot of the opportunity set to deploy capital in the private debt markets has increased.

It's gone from just corporate lending. It's expanded into asset-based finance. It's moved into other areas, which is effectively capital replacement within the financial institution market. A lot of what is captured in what was called SRTs or significant risk transfers. I think the other an opportunity that's creating a driver of demand for investment opportunity is concerns over inflationary pressures.

We're concerned about companies that are negatively impacted by inflation. you can structure around that. If you're looking to get yourself exposed to companies that benefit from an inflationary environment. you can get long those assets. So I think there's ways to capitalize uncertainties, in private markets that you can't in public markets.

What should clients be asking their private debt investment partners?

The starting question has to be, are you buying into other people's transactions or you're leading in structuring and providing exposures that can't be found elsewhere?

The market is competitive, and you have to basically be able to discern whether or not you have a competitive advantage from either a sourcing or underwriting perspective, relative to the alternatives in the market. I think the second is, if you're truly being opportunistic, what does that mean? Sometimes the public markets present more compelling opportunities in the private market and vice versa.

So having a strategy that can pivot across both and that can have the conversation directed towards why did you deploy capital into a secondary market exposure versus focusing on a primary financing - I think that's very important.

Important information

This material is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Reliance upon information in this material is at the sole risk and discretion of the reader. The material was prepared without regard to specific objectives, financial situation or needs of any investor.


This communication is not an offer and should not be deemed to be a contractual commitment or undertaking between the intended recipient of this communication and BlackRock but an indication of what services may be offered subject to a legally binding contract between the parties and therefore no reliance should be placed on this document or its content.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Any reference herein to any security and/or a particular issuer shall not constitute a recommendation to buy or sell, offer to buy, offer to sell, or a solicitation of an offer to buy or sell any such securities issued by such issuer.

In the U.S., this material is for institutional use only – not for public distribution.

In Canada, this material is intended for institutional investors, is for educational purposes only, does not constitute investment advice and should not be construed as a solicitation or offering of units of any fund or other security in any jurisdiction.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Opinions, assumptions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This communication and its content represent confidential information. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. You should consult your tax or legal adviser regarding such matters.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, where certain historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) has been included in this material, such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

Past performance is not a guarantee of future results. Asset allocation and diversification strategies do not guarantee profit and may not protect against loss. Risk management and due diligence processes seek to mitigate, but cannot eliminate, risk nor do they imply low risk. Investment involves risk, including a risk of total loss.

Stock and bond values fluctuate in price so the value of your investment can go down depending upon market conditions. The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. The principal on mortgage- or asset-backed securities may be prepaid at any time, which will reduce the yield and market value of these securities. Obligations of US Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the US Government. Investments in non-investment-grade debt securities (“high-yield bonds” or “junk bonds”) may be subject to greater market fluctuations and risk of default or loss of income and principal than securities in higher rating categories. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. International investing involves risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging / developing markets or smaller capital markets.

The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock, Inc. and/or its affiliates (together, “BlackRock”) to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof. BlackRock believes that the information in this document was correct at the time of compilation, but no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents.

©2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.


Drivers of growth in private debt

David Trucano, Head of BlackRock Opportunistic Credit, delves into the role we think private debt can play in a client’s portfolio. He emphasizes what clients need to know about opportunistic credit and the questions they should be asking their private debt investment partners.

Why BlackRock?

Differentiated sourcing
Highly selective, multi-channel approach to investment sourcing
Superior risk management
Experienced teams with global and local market perspectives
Proven track record
Established investment history and track record

Venture and growth debt

Operationally flexible loans to innovative, high-growth companies

Why now?

  • Favourable market dynamics: Dynamics of venture & growth markets highly favourable towards a structured debt strategy
  • Enhanced returns: Potential for equity-like returns with credit-level risk driven by predominantly income and some capital appreciation
  • Downside mitigation: Target transactions only alongside top-tier equity sponsors. Focus on well-funded companies with long cash runways, experienced management teams, underlying profitability, and where senior-security available.

Why BlackRock?

Differentiated sourcing
Highly selective, multi-channel approach to investment sourcing
Superior risk management
Experienced teams with global and local market perspectives
Proven track record
Established investment history and track record

Infrastructure debt

Global platform investing in energy, power, renewables, transport, social and digital assets

Why now?

  • Income: Potentially higher income relative to similarly rated corporate credit.
  • Diversification: Historically, 2-2.5x lower loss rates and low default correlation3 to corporate credit; complements OECD core equity infrastructure.
  • Liability matching: Longer maturity debt providing for 10-25 year+ liability matching.
  • Inflation risk mitigation: Floating rate infrastructure debt may provide inflation management in a rising rate environment.

Why BlackRock?

Resilient performance
Zero credit losses or payment defaults across all 150+ assets since platform inception1
Experienced global team
34 investment professionals with senior members averaging 20+ years experience1
Longstanding platform
Ranked #1 globally with $20+ billion in client assets and $15+ billion deployed and committed to date1

Real estate debt

Our platform combines global reach, industry expertise, and trusted deal execution capabilities

Why now?

  • Market depth: Retrenchment of traditional lenders (banks) creates a large opportunity set for private lenders like BlackRock to meet borrower needs for refinancing and new capital.
  • Risk-adjusted returns: Private market spreads widen as bank activity recedes; Combined with increased base rates, this has potential to boost returns across the capital stack and at all risk (LTV) levels.
  • Diversification & Income: Significant diversification opportunities across regions, properties, sectors and loan types. Ability to adjust exposures to capitalize on prevailing market environment.

Why BlackRock?

Global expertise
Experience structuring and negotiating transactions to deliver relative value for clients for nearly 25-years
Global presence and deep local relationships creates a large opportunity set
Clients seek BlackRock as a trusted partner with their capital across real estate debt

Multi-strategy debt solutions

Flexible single entry point global solutions across credit universe

Why now?

  • Simplicity: Access to dedicated multi-credit teams improves efficiency and reduces governance complexity as clients seek to do more with fewer managers
  • Flexibility: Active allocation across opportunities in global credit as the market evolves
  • Transparency: Holistic view of credit exposures improves risk oversight while delivering integrated reporting

Why BlackRock?

Global expertise
Knowledge and insights across asset classes and sectors
Risk & technology edge
Risk management foundation and dedicated teams, powered by Aladdin®
Proven track record
Established investment history and track record in multi-credit portfolios

Learn more about the role of private debt in your portfolio

Private debt is not just a strategy, it’s a burgeoning ecosystem of $1.9 trillion assets and growing to meet the evolving needs of investors and borrowers. BlackRock can help address full suite of investor objectives across the risk-return spectrum, liquidity needs, regions, currencies and ESG objectives.
Convo Bubbles icon

Latest insights

Private debt: Exploring the nuances

Discover the growth of the global private debt market. Learn about the dispersion across strategies, portfolios, and vintages in a high cost of capital environment.
Private debt primer cover

Sign up to receive BlackRock's institutional insights

Stay ahead of the markets with insights from our strategists and portfolio managers, uncover the latest on the global economy and geopolitics among other timely investment ideas.
Economic Growth icon

Contact our institutional team to learn more

Please click here to opt-in to receiving insight emails from BlackRock. Any data collected will be processed according to BlackRock's privacy policy. You may unsubscribe at any time.

*Required information | Read our Privacy policy

Thank you for reaching out!

A BlackRock representative will reach out shortly. In the meantime, explore our website to read insights on the markets, portfolio design and more.

Explore our insights hub