Private credit hit deployment record last year: Alternative Credit Council report

THE amount of capital that private credit firms have deployed reached a record last year, indicated a new report from the Alternative Credit Council (ACC), with larger players such as Ares Management, Apollo Global Management and Blackstone playing an increasingly dominant role.

Capital deployed in private credit deals ballooned to US$592.8 billion in 2024, a 78 per cent year-on-year increase from the US$333.4 billion deployed the previous year, said the report by the ACC, an industry body for private credit funds that is affiliated with the Alternative Investment Management Association.

While the figures come with a lag, the limited visibility into private-credit markets and the lack of consistent deployment data make the 2024 numbers a useful benchmark.

That year’s deployment level also dwarfs the amount seen in 2021 and 2022, which came in at US$127 billion and US$203 billion, respectively.

Such momentum looks set to amplify the role that private credit firms are expected to play, particularly in Europe where they might step in as regulation restricts bank lending, said Stuart Fiertz, co-founder, president, head of responsible investment and director of research at Cheyne Capital. “This leaves a vast real-economy demand for credit that only private lenders can meet,” he told the report’s authors.

Deployment trends

The bulk of capital deployment comes from private credit heavyweights that have the resources to finance heftier transactions. The largest players, which include alternatives asset managers such as Ares, Apollo and Blackstone, accounted for 85 per cent of deployment last year.

“The market is maturing very quickly, so the value of large platforms is increasing for investors,” Patrick Linnemann, senior managing director at Blue Owl Capital, told the ACC.

Large players are deploying more after raising larger funds, thanks to the industry’s biggest supporters: pension funds and insurance companies. These investors are together responsible for almost 60 per cent of allocations for the largest 20 per cent of respondents, said the report.

Interviewees pointed out that investors in private credit firms – so-called limited partners – are seeking to allocate their capital to fewer managers to reduce the costs and friction of managing the allocation.

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But while top dogs in private credit are both raising and deploying more capital, there are benefits to working with smaller firms which offer investors domain expertise in particular markets, the report noted.

The ACC findings – which looked at investments in private credit and took into account corporate lending, asset-based lending, real estate and infrastructure debt – estimated that the industry managed around US$3.5 trillion in assets in 2024.

That amount was a 17 per cent increase from the estimate of US$3 trillion at the end of 2023. The approximation was larger than other industry estimates, which typically take only corporate lending into consideration.

Notably, the report also found that while just more than three-quarters of private credit capital came from institutional investors, retail participation grew considerably in the past decade to reach an estimated 24 per cent of the investor base.

This is expected to grow further, particularly in the US following proposals to allow 401(k) (retirement savings) plans to invest in private assets.

“The 401(k) opportunity in the US is positive for private markets, but greater regulatory clarity and guardrails will help to facilitate adoption,” Blair Jacobson, partner and co-president of Ares, said. BLOOMBERG