Private credit has grown into a global asset class exceeding $2.5 trillion, driven by banks retreating from riskier lending and investor returns climbing toward 12%. A handful of firms — Apollo, Blackstone, Ares, KKR, and Blue Owl — now dominate the market, and Blue Owl has extended it into AI infrastructure with a $27 billion data center financing for Meta, even as the IMF and the Federal Reserve disagree on how much systemic risk this concentration carries.
How Did Private Credit Grow Into a $2.5 Trillion Market, and Who Leads It?
Global private credit assets under management surpassed $2.5 trillion in 2025. The Bank for International Settlements (BIS) put the figure at more than $2.5 trillion, while the International Monetary Fund (IMF) separately estimated the market has grown roughly fivefold since 2009CITE:E1. Both institutions note that the exact number shifts between $1.5 trillion and $2.5 trillion depending on whether unfunded commitments are counted and whether the scope is U.S.-only or globalCITE:E1.
A small group of alternative-asset managers accounts for most of that scale. Based on each firm's own year-end 2025 disclosures, Apollo reported roughly $749 billion in credit assets under management, Blackstone's credit-and-insurance segment (BXCI) reported about $443 billion, Ares reported approximately $407 billion, KKR reported about $322 billion, and Blue Owl reported about $158 billion across its credit platformCITE:E2.
| Firm | Credit AUM (year-end 2025, self-reported) |
|---|
| Apollo | $749 billion |
| Blackstone (BXCI) | $443 billion |
| Ares | $407 billion |
| KKR | $322 billion |
| Blue Owl | $158 billion |
The five figures are not perfectly comparable, since some firms' "credit" segments include insurance-related assetsCITE:E2.
How Has Bank Retreat Fueled the Rise of Private Credit?
A measurable retreat by traditional banks from riskier lending has directly fueled private credit's expansion. The BIS found that a one-standard-deviation decline in banking-sector efficiency corresponds to roughly a 33% increase in private credit activity — the single largest factor identified in its analysisCITE:E3. The BIS attributes this to stricter bank regulation imposed after the financial crisis, which pushed financing for higher-risk and mid-sized borrowers toward non-bank lendersCITE:E3.
How Have Rising Returns Drawn Capital Into Private Credit?
Rising returns have pulled investor capital into private credit at an accelerating pace. Preqin estimates that the average internal rate of return (IRR) for private debt rose from 8.1% over 2017–2023 to a projected 12.0% over 2023–2029CITE:E4. Direct lending is predominantly structured at floating rates, and its yields typically run above those of broadly syndicated loans and public high-yield bondsCITE:E4.
How Is AI Data Center Financing Driving Private Credit Demand?
Meta and Blue Owl completed the largest private credit transaction on record to fund an AI data center. In October 2025, the two parties agreed to roughly $27 billion in debt financing for the Hyperion data center in Louisiana, bringing the combined debt-and-equity package to about $30 billionCITE:E5. Morgan Stanley separately estimates that AI data centers, power infrastructure, and fiber networks will require approximately $800 billion in private credit funding between 2025 and 2028CITE:E5.
What Systemic Risks Does Private Credit Pose, and How Do Regulators Assess Them?
The IMF has warned that private credit's opacity and layered leverage could evolve into a systemic risk if left unchecked. It points to relatively fragile borrowers, a rising share of semi-liquid investment vehicles, multiple layers of leverage, valuations that are often stale or subjective, and opaque interconnections among participants — while explicitly stating that these vulnerabilities have not yet become systemicCITE:E6.
The Federal Reserve takes a more measured view. Its April 2025 Financial Stability Report rated corporate credit vulnerability as "moderate" and characterized the associated risk as "limited and contained"CITE:E7. The Fed's assessment notes structural differences from the 2008 crisis: private credit capital is typically locked up for defined periods, leverage and maturity mismatches run lower than at banks, and the sector carries no deposit liabilities subject to runsCITE:E7.
What This Means
The same forces that built a $2.5 trillion market — banks stepping back under tighter regulationCITE:E3 and investors chasing returns that climbed toward 12%CITE:E4 — are now the forces financing individual AI infrastructure deals at a scale, $27 billion in one transaction, that rivals what many of these firms manage in total credit assetsCITE:E5CITE:E2. That concentration is exactly what the IMF's warning is aimed at, even as the Fed currently rates the associated vulnerability as moderate rather than systemicCITE:E6CITE:E7.
Author's Take・林紀旭 James Lin
The Meta-Blue Owl transaction is the clearest sign yet that private credit's growth has moved from corporate lending into infrastructure finance: at roughly $27 billion, a single deal equals more than one-sixth of Blue Owl's entire $158 billion credit platform. That kind of concentration is precisely what the IMF's warning is aimed at — a handful of firms, Apollo, Blackstone, Ares, KKR, and Blue Owl, now underwriting AI infrastructure at a scale where any one deal's leverage or valuation assumptions carry outsized weight. The real question isn't whether this keeps growing — Morgan Stanley's $800 billion estimate for 2025–2028 suggests it will — but whether deal sizes keep scaling faster than the valuation transparency the IMF flagged. Watch whether the next AI data center financing approaches or exceeds the $27 billion Hyperion benchmark, and whether the Fed's 'moderate' rating still holds when it does.