The global private credit market reached US$3.5 trillion in assets under management by the end of 2024, up 17% from the end of 2023, according to research by the Alternative Credit Council (ACC) and investment bank Houlihan Lowkey.
Released this month, Financing the Economy 2025 is the 11th in a series of annual reports published by ACC, the private credit affiliate of the Alternative Investment Management Association (AIMA). ACC represents 250 members that collectively manage more than US$2 trillion in private credit assets.
“Our data shows another year of strong growth and diversification for the sector, underlining its importance as a financing option for borrowers and as a critical part of investor portfolios,” Jiří Król, global head of the Alternative Credit Council, said in a release.
The report’s numbers are estimates based on the ACC’s own research, including a survey it conducted of private credit managers along with Houlihan Lokey, additional interviews with leaders in the industry, Preqin data and publicly available data. The ACC said the survey data was based on responses from 49 private credit managers managing US$2.1 trillion in assets.
In 2024, survey respondents deployed roughly US$592.8 billion across private credit strategies, up 78% from the US$333.4 billion in 2023, the report said. That represents an accelerated pace from the previous two years, when growth in deployment rose 64% and 60%, respectively.
Those financings weren’t evenly spread out, the ACC found. The largest private credit managers representing the top 20% deployed approximately 85% of capital in 2024 (US$503.25 billion).
Corporate lending accounted for 60% of current private credit investments, the report noted. But other areas are growing — particularly asset-backed lending, which accounted for 16% of capital deployed by respondents last year. Infrastructure debt and real estate debt were the next largest categories.
While Król noted in the release that non-performing loan levels have risen in the last couple of years, he said they now seem to have stabilized around historical averages. Other indicators of defaults and portfolio stress also declined from recent peaks during the Covid pandemic, the report said, although they remain slightly above historical averages.
“Leverage is modest, and fund structures continue to be designed for resilience,” Król added.
According to the report, aggregate leverage among survey respondents was roughly 32% of their net private credit AUM (US$398 billion), a level that has remained relatively steady for the past decade.
Non-accrual rates (a risk metric measuring missed interest payments) indicated by respondents for flagship corporate lending funds were at 2.2% on average, and 1.8% on a weighted AUM basis. That’s consistent with reported non-accrual rates for business development company (BDC) loans, of between 1–2% for the past four years. Survey respondents also indicated that falling interest rates and a pickup in key sectors in the U.S. and Europe would mitigate future default rates.
In addition, the report noted that 80% of private credit committed capital accounted for in its survey is held in closed-ended rather than semi-liquid structures.
Growth opportunities
While the U.S. dominates the private credit market, the report noted that some of that capital is starting to move to other regions, particularly Europe. Although 65% of private credit AUM is invested in the U.S., the country only accounted for 54% of deployment volume in 2024, it said.
“This indicates that deployment volumes outside the U.S. were higher than their current pro-rata market share, with Europe a key beneficiary,” said the report. In interviews, industry leaders were enthusiastic about Europe’s value proposition, citing a continent-wide focus on building digital, energy, defence and transport infrastructure as supporting growth, as well as better terms for lenders.
As for 2025, the report noted that the private credit market has held up well, although lenders have seen more competition from the broadly syndicated loan market. The return of banks and BSL investors to the market, after reduced activity in 2022 and 2023, has led to narrower pricing and spreads, especially in the U.S., it said.
In addition, U.S. tariffs announcements and uncertainty reduced M&A deal flow — a driver of deployment opportunities — early in the year. However, industry leaders interviewed by ACC reported private credit deal activity has picked up significantly since the summer.
Deal value to the end of November was up compared to last year as a whole (US$1.9 trillion from US$1.6 trillion), according to data from LSEG, but deal volume was down (under 17,100 deals vs. just over 27,000 for all of 2024).
Retail access
While institutional investors still provide 76% of private credit capital, retail participation (in this case referring to high-net-worth individuals) has grown to nearly a quarter (24%). Further growth is expected as access to private credit expands, including in the U.S., where an executive order this year could allow investors to hold alternative assets, including private credit, in their 401(k) retirement plans.
In a release, Cindy Ma, managing director, global head of portfolio valuation and fund advisory at Houlihan Lokey, said growth in demand for private credit has been driven by investor demand, which remains “robust.”
“While we’ve observed some spread compression, the returns in private credit are still very attractive compared to more liquid alternatives,” Ma said. “This enduring premium is why we are seeing a broader range of investors, from large institutions to family offices, continue to build their allocations in this space.”
A September report by Morningstar DBRS questioned whether the yield premium associated with private credit investments would remain consistent as access to private credit expands, however.