Odd Lots Blackstone's Michael Zawadzki on How Private Credit Got so Big
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Jan 23, 2026 
Michael Zawadzki, Global CIO for Blackstone Credit and Insurance, dives into the explosive growth of private credit over the last two decades. He discusses how large-scale direct lending has shaped AI financing, emphasizing the high demand for capital in digital infrastructure. Michael highlights the advantages of scale in securing major deals and the evolution of risk management within private lending. He addresses the competitive landscape, future trends, and the advantages that insurers find in private credit assets. The conversation also touches on the role of AI tools in the investment process.
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How Private Credit Transformed Lending
- Private credit cut out intermediaries and connected borrowers directly to investor capital, creating efficiency and higher returns.
- The model reduced market leverage and improved financial stability, fueling its long-term growth.
Scale Made Big Deals Possible
- Growth in private credit depended on scale: large capital pools enabled mega deals that were impossible two decades ago.
- Expansion beyond middle-market lending created a multitrillion-dollar addressable market across asset-backed and real-asset finance.
Senior Secured Risk Looks Better Today
- Today's senior secured private loans generally show stronger credit profiles than early private deals, with lower leverage and healthier metrics.
- Underwriting standards and collateral levels often compare favorably to historical bank-era lending.