Private credit has become a frontrunner, overtaking previously favored options such as cryptocurrency, commercial real estate, and other noncorrelated assets. 

2022 posed significant challenges for traditional investment portfolios, particularly the widely adopted 60/40 portfolio strategy. Both components of this strategy faltered, with the S&P 500 experiencing a decline exceeding 18% and the iShares Core U.S. Aggregate Bond index witnessing a drop of 13%. 

As of last March, global private credit, excluding real estate, has experienced a substantial surge, reaching approximately $1.6 trillion in assets under management (AUM), according to data from Preqin. This places the sector in league with some extensively monitored U.S. high-yield bond and leveraged loan indices. Despite this robust global growth, deployed capital in North America specifically amounted to around $698 billion as of the same period. 

A BlackRock report, cited by InvestmentNews, underscores that the overall demand for private credit, particularly from high-quality borrowers, is robust. This trend is anticipated to generate substantial deal flow, providing fund managers with the opportunity to be discerning in capital deployment.

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