Research @ Citi Episode 54: Private Credit’s Trillion-Dollar Takeover — Growth, AI, & the Future
Nov 6, 2025
Michael Anderson, Head of Credit Strategy at Citi, dives into the booming world of private credit. He shares insights on how private credit has evolved from a niche market to a key player in funding AI developments and sponsor-backed deals. The conversation highlights the customization of financial terms in private markets and the privacy benefits for borrowers. Additionally, Anderson discusses the risks AI poses to traditional cash flow models and forecasts the growth prospects for the sector amid changing market dynamics.
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Private Credit Has Become Broad And Diverse
- Private credit has expanded beyond middle-market lending into securitized IG and AI financing, making the term increasingly broad.
- Retail wrappers and emerging secondary trading are bringing private credit closer to public-market behaviors.
Customization Is Private Credit's Edge
- Private credit mimics public-market functions with trading desks, syndicates, analysts, and portfolio managers.
- Its real advantage is customization of covenants, maturities, and equity linkages that public markets can't easily offer.
Illiquidity Can Be A Feature Not A Bug
- Private loans trade infrequently and move on company fundamentals rather than daily market volatility.
- Borrowers often prefer illiquidity to avoid public mark-to-market swings affecting perceptions.