Wealthy individuals fuel boom in private credit: FT

Private credit funds are attracting record inflows from wealthy investors, making up for slower commitments from pensions and endowments, the Financial Times reported on Sunday.

Affluent Americans invested $48 billion in such funds in the first half of 2025, already surpassing last year’s total and on pace to top the $83.4 billion record set in 2024, according to RA Stanger data cited by the newspaper. In Europe, assets in evergreen private debt funds more than doubled in a year to €24 billion, data from Novantigo show.

Moody’s has described retail money as one of the sector’s “biggest new growth frontiers,” underscoring how asset managers are targeting individuals after lobbying for broader access to retirement accounts. Blackstone’s (NYSE:BX) Brad Marshall said demand is being driven by an “underpenetrated market” where private debt can deliver higher yields than public securities.

While traditional institutional fundraising has slowed since 2021, individual flows have accelerated, particularly into evergreen vehicles such as non-traded business development companies and interval funds. Unlike closed-end funds, they allow ongoing subscriptions and periodic redemptions, which proved resilient during recent market volatility. Brookfield’s John Sweeney said this showed investors see stability in alternatives rather than fleeing during downturns, the FT reported.

Blackstone (NYSE:BX) remains the dominant player, with its Bcred fund pulling in $6.5 billion this year and $11.7 billion over 12 months, lifting its assets to $73 billion. But competition is rising: Apollo (NYSE:APO) has raised $6.4 billion for its Debt Solutions fund, Blue Owl (OWL) (OBDC) about $7 billion, Ares (ARES) $5 billion, and Cliffwater (CCLFX) (CELFX) (CCLDX) nearly $11 billion, giving it a significant presence among independent advisers.

Blackstone (BX) once controlled nearly 90% of the market for non-traded BDCs, but that share has fallen to 28% as rivals expand distribution. Ares (ARES) executive Raj Dhanda noted that wealth managers wanted more fund options, though only a handful of large firms are drawing meaningful inflows, the FT reported.

The surge in demand reflects the post-crisis shift of lending from banks to asset managers. But with money pouring in, competition for deals is eroding returns.