Private credit has firmly established itself as one of the most dynamic segments in global capital markets, experiencing rapid growth that shows no sign of slowing. Once seen as a niche alternative to bank-led lending, the asset class has matured into a core allocation for institutional investors, supported by a combination of strong returns, flexibility, and its ability to adapt to evolving borrower and market needs.
As we progress through 2025 and beyond, private credit is not only expanding in scale but also diversifying in structure, strategies, and geographies. With institutional appetite broadening, structuring techniques becoming more sophisticated, and technology accelerating efficiency, the sector is expected to continue its robust trajectory. For investors, managers, and borrowers alike, private credit is reshaping the financing landscape.
Institutional investors—sovereign wealth funds, pension funds, and insurance companies in particular—are now the bedrock of private credit’s expansion. These investors are drawn to its blend of yield enhancement, diversification, and resilience, particularly in an environment where traditional fixed income often fails to deliver compelling returns.
2024 was a record-breaking year, with global private credit fundraising volumes surpassing previous highs. Direct lending accounted for over 75% of the capital raised, underlining the continuing dominance of this strategy. Yet beneath the surface, an important evolution is underway. Investors are no longer restricting themselves to mainstream direct lending but are increasingly embracing niche opportunities in asset-based lending, litigation finance, and royalty financing. These specialised strategies reflect growing confidence in private credit as an asset class that can provide targeted exposure across different sectors and risk-return profiles.
Another notable development is the rise of "mega funds". The largest managers are capturing the majority of inflows, as investors seek scale, track record, and operational infrastructure. This trend is leading to a concentration of capital at the top end of the market, with a handful of global firms managing multi-billion-dollar pools that can execute on sizeable and complex deals.
For institutions, the attraction is clear: private credit offers contractual cash flows, downside protection through covenants, and the potential for attractive illiquidity premiums. As allocations increase, it is evident that private credit is no longer just an alternative—it is becoming mainstream.
While direct lending remains the cornerstone of private credit, structuring is evolving rapidly to accommodate borrower demands and to differentiate managers in a crowded marketplace.
Specialty credit and opportunistic strategies are gaining ground, with capital being deployed into less saturated, higher-yielding segments. This is particularly true in areas where banks have retrenched, such as mid-market lending, real estate, and infrastructure.
The sophistication of structuring has also advanced considerably. Deals increasingly feature elements such as:
These tailored solutions enable borrowers to secure funding that is both flexible and responsive to their specific circumstances, while investors benefit from carefully calibrated risk-return dynamics.
The rise of large, complex transactions further underscores this trend. In early 2025, a $5 billion debt package included annual recurring revenue loans and revolving credit facilities—an example of how private credit is increasingly stepping into spaces once dominated by investment banks. Such deals reflect the ability of private lenders to provide bespoke capital at speed and scale, positioning them as critical partners in global financing.
One of the most striking developments in private credit has been the rapid adoption of technology and artificial intelligence across the investment lifecycle.
From underwriting to monitoring and investor reporting, digital platforms are helping managers build more scalable and transparent operations. Data normalisation, automated workflows, and real-time analytics are being deployed to enhance due diligence and portfolio management, while also meeting the rising expectations of institutional and retail investors for timely insights.
AI-driven credit scoring, scenario modelling, and predictive analytics are already reshaping underwriting practices, offering deeper risk assessment and more precise pricing of loans. Meanwhile, digital investor portals are providing real-time visibility on fund performance, cash flows, and risk metrics.
For managers, the integration of technology not only reduces operational costs but also provides a competitive edge in sourcing, structuring, and managing deals at scale. For investors, it brings reassurance that private credit platforms can handle increasing allocations with efficiency and rigour.
Private credit’s expansion is truly global. While North America remains the largest and most mature market, Europe and Asia are fast-growing frontiers.
India stands out as a particularly compelling case study. In the first half of 2025 alone, the market recorded $9 billion of investments, with global funds participating in several landmark deals. Drivers include the country’s strong growth trajectory, its under-penetrated banking system, and rising demand for alternative sources of capital in both corporate and infrastructure sectors.
Beyond India, Southeast Asia, the Middle East, and parts of Latin America are also seeing increased activity, often led by cross-border deals in which global funds provide strategic growth capital.
Sectorally, real estate, infrastructure, and new-economy businesses dominate private credit allocations. These sectors benefit from long-term demand drivers but often struggle to secure tailored financing from traditional banks. Private lenders are stepping in to fill the gap, offering capital that is faster, more flexible, and bespoke.
Looking ahead, the trajectory of private credit seems clear. Institutional allocations are set to rise further, mega funds will continue to dominate large-scale transactions, and niche strategies will attract specialist investors. Structuring will grow more creative, with hybrid solutions and bespoke features becoming the norm rather than the exception.
Technology will remain a catalyst, helping the industry evolve from fragmented, relationship-driven transactions to data-driven, scalable platforms capable of supporting trillions in assets under management.
In short, private credit is moving from strength to strength, not only as a complement to traditional finance but as a pillar of the global financial system.
At Global Banking & Markets (GBM), we provide more than just insights—we create the infrastructure for dealmaking. Through our international events, conferences, and networking platforms, GBM connects institutional investors, fund managers, corporates, and policymakers, enabling cross-border dialogue and partnerships that drive capital flows.
Whether you are seeking to explore private credit opportunities, connect with global allocators, or structure innovative financing solutions, GBM offers a unique ecosystem that fosters meaningful engagement. Our events in financial hubs worldwide bring together decision-makers shaping the future of banking and markets, providing not only knowledge but also tangible opportunities to transact.
As private credit continues its rise, GBM remains at the forefront—bridging markets, building networks, and supporting the deals that will define the next chapter of global finance.