Private Credit Resilience 2025 Holds but Risks Rising, Experts Warn

Private credit resilience 2025 has held up with strong returns from direct lending, but experts warn risks are rising as markets face rate cuts and tighter spreads. UBS said market bifurcation is intensifying, with the lower-middle market showing signs of stress while the upper segment remains healthier. Muzinich & Co’s Andrew Tan highlighted risks from limited diversification, with many managers crowding into the same large-cap sponsor deals, raising exposure for retail investors. S&P Global warned that concentration among a small group of private fund managers further reduces diversification. The Bank of Singapore noted returns, boosted by high rates in recent years, will normalise as base rates fall, though demand for private credit remains strong and expected to grow.