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Private Credit: How Early Success Created Today’s Risks
Private credit was originally developed to finance loans that were too complex, illiquid, or long-term for traditional banks and public bond markets. It filled an important gap by matching those investments with institutional investors, such as pension funds and life insurers, that could commit capital for extended periods.
Over the past decade, however, the asset class has grown dramatically. Increased demand for annuities, broader retail participation, and the search for higher yields have fueled demand well beyond its traditional investor base, raising new questions about liquidity…
The skinny
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