The Driving Forces Behind the Soaring Growth of Private Debt Investments

As financial advisors and clients search for ways to diversify their investments outside of traditional market swings and concerns about a potential recession, private debt has emerged as a promising alternative. Private debt, also known as private credit, allows high net worth individuals and retail clients to invest in notes tied to financing secured by companies outside of banks or public markets. The global private debt market has experienced significant growth, reaching $1.3 trillion in investments as of September 2022. This surge in popularity has been attributed to factors such as tightening regulation of banking loans, increased demand for buyout financing, and the search for higher-yielding fixed-income replacements.