Finance
Private Credit Funds Move From Mergers to Timeshares and Car Loans
As banks pull back, the investment funds—cousins of private equity—make a move on Main Street debt.
Illustration: Nick Little for Bloomberg Businessweek
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Since the fall of Silicon Valley Bank in March, banks across the US have been maneuvering to shore up their capital while deposits shrink and investors eye their balance sheets. The easiest way to do that has been to pull back on financing for small and midsize businesses as well as consumer credit companies such as buy now, pay later and auto lenders. That’s provided a huge opening for the new rising power on Wall Street: private credit funds.
These funds, which are similar to private equity firms but focused on lending to instead of buying companies, manage about $1.5 trillion.