Wealthy investors pile into private credit

Private credit funds are seeing record investments from wealthy investors, offsetting weaker demand from large institutions, the Financial Times reports. 1H 2025 saw US investors alone plow USD 48 bn into private credit funds, surpassing the FY total for 2023 and on track to beat the USD 83.4 bn record set in 2024, according to investment bank RA Stranger.

Policy tailwinds are reshaping the market: In August, US President Donald Trump signed an executive order allowing private equity and credit into 401k retirement plans. Managers had long lobbied for access to retirement savers, and are increasingly tailoring products for this retail base. Moody’s has called the shift “one of the biggest new growth frontiers in the industry.”

Blackstone remains the dominant player, with its Bcred fund drawing USD 6.5 bn YTD and USD 11.7 bn over the past 12 months. On average, more than USD 50 mn of fresh orders are placed daily, helping lift Bcred’s assets to USD 73 bn, up more than 50% in two years.

Rivals are closing in: Apollo Debt Solutions raised USD 6.4 bn over the past year, Blue Owl took in around USD 7 bn across two funds, and Ares collected USD 5 bn. Cliffwater, a smaller manager, has emerged as a major competitor, attracting nearly USD 11 bn to a fund now worth over USD 30 bn. That competition has chipped away at Blackstone’s dominance, with its share of the non-traded BDC market falling to 28%, compared to an almost 90% market share in 2021.

Europe is seeing similar momentum: Assets in evergreen private debt funds — vehicles that don’t wind down and allow continuous inflows — more than doubled y-o-y to EUR 24 bn by June, Novantigo data shows. The number of such funds has jumped from six in 2022 to 37 this year, with Blackstone, Ares, and HPS among those fundraising.

The boom comes as institutional appetite wanes. Preqin data shows commitments from pensions and endowments have declined each year since 2021, amid a broader downturn in the leveraged buyout industry as it struggles to return capital and generate fresh inflows.

Still, concerns linger that the flood of banknotes could weigh on returns. “It’s a tricky investment environment driven by the imbalance between supply and demand of capital,” Sixth Street’s Joshua Easterly said, adding, “[c]ompetition is elevated, and it’s increasingly difficult to generate outsized returns.”

MARKETS THIS MORNING-

Asian markets are once again trading mixed, with South Korea’s Kospi leading gains with a 0.7% rise following slower-than-expected inflation growth in August. Meanwhile, Japan’s Nikkei is also up 0.6%, while Hong Kong’s Hang Seng is flat and China’s CSI 300 is down 0.1%.

Over on Wall Street, futures are inching up after a losing session for all three indices yesterday, as we kick off what is known to be a seasonally weak month for stocks.

THE CLOSING BELL-

The ADX fell 0.8% yesterday on turnover of AED 2.2 bn. The index is up 6.3% YTD.

In the green: Investcorp Capital (+3.1%), National Corporation for Tourism & Hotels (+2.5%) and Mair Group (+2.3%).

In the red: Umm Al Qaiwain General Investment Co. (-9.9%), E7 Group Warrants (-9.6%) and Gulf Medical Projects Company (-7.8%).

Over on the DFM, the index fell 1.6% on turnover of AED 544.8 mn. Meanwhile, Nasdaq Dubai was down 1.8%.

CORPORATE ACTIONS-

Adnoc petrochemicals JV Borouge shareholders approved the distribution of USD 660 mn in interim dividends — at 8.1 fils per share — for 1H 2025, according to an ADX disclosure (pdf). Its new polyolefins entity, Borouge Group International, which is set to complete its merger with the polyolefins business of Austria’s OMV next year, will aim to maintain a minimum annual dividend of 16.2 fils per share until 2030, the petrochemicals firm said. The new merged entity will be a USD 60 bn global polyolefins player — the world’s fourth largest — and will be based in the UAE.