Private Credit in 2025: Resilience, Liquidity, and Alpha

Private credit was once considered an edge case — a tool for distressed buyers and niche funds. But in 2025, it’s become a central pillar of portfolio strategy for family offices, institutions, and sovereign wealth players alike.

We’re seeing the shift up close. Across markets, borrowers are turning away from banks. Regulation, rising rates, and geopolitical frictions have created bottlenecks in traditional lending. That vacuum is being filled by private credit — and not just as a stopgap, but as a preferred path.

What’s Driving the Shift

The appeal is structural:

• Speed — traditional underwriting takes months. Private lenders can move in weeks.
  
• Flexibility — terms are bespoke, collateral is creative, and the risk model is agile.
  
• Yield — double-digit returns are common, especially when public markets feel stagnant.
  

For borrowers, it’s a lifeline. For allocators, it’s alpha.

Where the Capital Is Flowing

In 2025, we see four key arenas where private credit is unlocking value:

1. Shareholder Liquidity
   High-net-worth individuals and founders seek liquidity without selling core assets. Structured loans backed by equity or options are in high demand — particularly in Europe and Asia.
   
2. Asset-Backed Financing
   Real estate, art, and private company shares are increasingly accepted as collateral. Creative structuring is the name of the game.
   
3. Venture Debt and Growth Capital
   Startups and scale-ups, squeezed by tighter VC deployment, are turning to private debt instruments with revenue-based repayment or hybrid models.
   
4. Emerging Market Credit
   Especially in LatAm, MENA, and Southeast Asia — where local lending is constrained and dollar liquidity is at a premium.
   

Risks and Realism

We’re not in a zero-rate world anymore. Every private credit play must consider:

• Duration risk in a volatile macro cycle
  
• Regulatory differences across jurisdictions
  
• Exit optionality in case of default or borrower restructuring
  

This isn’t “easy money” — but for those with strong structuring capability, it’s smart money.

What We’re Watching

• Secondary markets for private credit instruments
  
• On-chain credit infrastructure for cross-border deals
  
• The rise of tokenized debt products backed by real-world collateral
  

In a noisy market, clarity wins. And private credit — when done right — offers exactly that.