Private Credit: Capital Markets Forecast

2025-05-07

Peter Ballantyne

Director, Capital Markets Research

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Private markets
Asset allocation

Private credit is non-bank lending provided by entities like private equity firms, hedge funds, or specialized funds. It finances companies that lack access to public capital markets or need flexible, tailored solutions. This includes direct lending, mezzanine financing, distressed debt, and other non-publicly traded debt forms.

This paper provides a comprehensive look at the asset class, including:

Core strategies such as direct lending, specialty finance, and special situations
Key return drivers like interest margins, fees, leverage, and equity participation
Risk considerations unique to private markets, including liquidity and downside exposure
Manager approaches that flex across strategies and market conditions
Trends shaping the future, from structural growth to evolving borrower profiles

Russell Investments' Private Credit Capital Market Forecast

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