Private Credit Funds Set to Replace Banks Amid Rising Risks

The private equity funds Apollo, Blackstone, and KKR have already managed $1.9 trillion and aim to replace traditional banks. They are eyeing the $40 trillion US market, promising faster and more flexible lending. However, warning signs are flashing: nearly half of the borrowers now have negative cash flows, up from 25% at the end of 2021, with defaults rising even before Trump's tariffs. The real risk lies in these funds heavily lending to similar sectors like tech and services, often with opaque assets, without regulation, making potential problems harder to detect early. highlights the growing influence of private credit funds but also underscores serious concerns about financial stability and transparency.