An Investor’s Guide to Joining the Exclusive Private Credit Party
This asset class is Wall Street’s new obsession—and it’s branching into retail. Fees and complexity are high, and it may not be easy to get money out.
Illustration: Kate Prior for Bloomberg Markets
Blackstone Inc. Chief Executive Officer Stephen Schwarzman really kicked up public interest in private credit in 2023 when, talking about it, he said: “If you can earn 12%, maybe 13% on a good day … what else do you want to do in life?” But the asset class presents a few puzzles for outsiders, starting with how to define it. Broadly, private credit means loans that investment funds, rather than banks, originate, but from there it can include anything from financing for buyouts to asset-backed loans.
But how risky is it? Who’s buying it? Who should be? And, perhaps most important, how do they even do that?