Behind the Money
Private credit’s ‘golden era’ shows signs of tarnish
Aug 28, 2024
Join Eric Platt, a senior US corporate finance correspondent, and Amelia Pollard, a Due Diligence reporter, as they unpack the growing challenges facing private credit, especially highlighted by Pluralsight's loan troubles. They explore how this once-thriving sector now reveals hidden risks amid rising interest rates. The discussion dives into private equity's evolving strategies and the potential shortcomings of private credit firms in restructuring distressed companies. Tune in for insights that could shape the future of private lending.
20:34
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Quick takeaways
- The rise of private credit signals a major shift in lending practices, increasingly replacing traditional bank loans across various sectors of the economy.
- Pluralsight's recent loan troubles reveal critical risks within private credit, potentially leading to lower investor returns and a reevaluation of financing strategies.
Deep dives
The Rise of Private Credit
Private credit is experiencing significant growth, becoming a central topic on Wall Street. Its rise is attributable to a shift in lending practices where traditional bank loans have been supplanted by loans from private credit funds. This trend has touched vast sectors of the economy, including personal loans like student debt and corporate financing for items such as planes and rail cars. The growing dependence on private credit signals a transformation in how businesses are financed, indicating a potential lasting impact on the financial landscape.
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