DOGEing a Crisis

The Impact of Two Consumer Classes and the Fed Funds Rate Outlook 

A Tale of Two Consumers

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ARK Invest founder and CEO Cathie Wood expects that a “changing of the guard” at the United States Securities and Exchange Commission may turbocharge the economy and bring about an influx of innovation and investment in emerging technologies.  “Deregulation, defanging the SEC, FTC, and others, government spending cuts, tax cuts, and a focus on technologically enabled innovation are likely to turbocharge the US economy,” she said, in sharing a video posted by ARK Invest on X on Nov. 11. “We have more clarity now in terms of the investment landscape after the election,” 

‘Defanging the SEC’ may turbocharge US economy: Cathie Wood

Scott Kleinman, co-president at Apollo Global Management Inc., has warned markets not to get too comfortable with the current trajectory of inflation and interest rates. “Inflation is not tamed,” Kleinman said in a Bloomberg Television interview on Tuesday. “The Fed can say what it wants. You just have to open your eyes and look around.” Kleinman was speaking a week after Donald Trump won the US presidential election. The Republican has vowed to introduce a raft of import tariffs that economists warn could stoke inflation just as the US Federal Reserve has started to cut interest rates on the road to bringing price growth back to 2%.

Apollo’s Kleinman Says ‘Open Your Eyes, Inflation Not Tamed’

As lockdowns gripped Europe in late 2020, KKR was battling to plant its flag in one of the pandemic’s winning industries. The private equity pioneer lost out that year in its bid for German road bike maker Canyon, a darling of Instagram. But bankers later pitched KKR’s dealmakers a consolation prize: Accell, a less modish Dutch manufacturer.  It led to an investment that could become one of the New York buyout giant’s worst in Europe. KKR launched a €1.8bn bid to take Accell private with the backing of its largest shareholder, Teslin, in January 2022.  Less than two years later, Accell found itself struggling under the burden of its debts as a post-pandemic sales slump left it burning through cash. 

Is KKR’s bad bet on cycling the start of Europe’s private equity reckoning?

It’s fascinating how things change. Donald Trump is President-Elect and bitcoin’s price soars to over $80,000. Quite predictable as he will be the crypto-President, as mentioned in July,  but maybe a forecast of a bitcoin price of $100,000+ by year-end is not so outrageous after all. Then, what intrigued me, is two stories. The first is about stablecoin Tether and how it may rule out Howard Lutnick, billionaire CEO of Cantor Fitzgerald, from becoming Treasury Secretary; and the second is the launch of a new stablecoin by cryptocurrency titans including Robinhood, Kraken and Galaxy Digital.


Will the new America be based upon a digital dollar that is stable?

Federal Reserve Chairman Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.
"The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in Dallas. 

Powell says the Fed doesn’t need to be ‘in a hurry’ to reduce interest rates

Goldman Sachs has unveiled several new actions as it looks to strengthen its services for corporate and investor clients and grow its business in private credit, private equity, and other asset classes. These actions include the creation of a Capital Solutions group and the expansion of its alternatives investment team in its Asset and Wealth Management division. 
The Capital Solutions group will bring together and expand Goldman Sachs’ activities related to financing, origination, structuring, and risk management, which are currently part of its Global Banking and Markets division. 

Goldman Sachs launches Capital Solutions group to grow private credit and equity business

The turmoil in global markets this past week is causing private credit funds to question whether they should reconsider the ever-tighter loan margins they’re demanding. Industry stalwarts such as Ares Management Corp. and Blackstone Inc. have been charging less for private credit for most of this year, according to data compiled by Bloomberg News, as they try to snatch business away from the syndicated loan market. But that strategy may change after recession fears have risen amid a slew of worrying economic reports. 

Private Credit Is Eyeing Bigger Margins on Loans: Credit Weekly

Companies owned by private equity firms are landing in default more frequently than other speculative-grade borrowers, according to a report from Moody’s Ratings. Private equity-backed companies defaulted at a rate of 17% between January 2022 and August of this year, twice the rate of non-private equity-backed companies, Moody’s said in the report released Thursday. Among the 12 largest private equity sponsors — as ranked by Moody’s — the default rate was slightly lower at around 14%.  Platinum Equity had the highest number and share of defaults, out of Moody’s ranking of the 12 largest sponsors, followed by Apollo Global Management and Clearlake Capital Group. 

PE-Backed Firms Suffering Higher Default Rates, Moody’s Says

Guernsey stock exchange now provides a facility for trading shares in privately held companies. A stock exchange based in the Channel Islands is trying to capitalise on a global drought in initial public offerings with the launch of a facility for buying and selling shares in privately held companies. But this reinvention of its role looks likely to attract stiff competition from larger rivals. The International Stock Exchange (TISE) — which has, for years, specialised in providing a listing venue for corporate debt — last year launched a unit allowing private companies to run auctions in their own shares, without the need for a broker.


TISE finds best place to capitalise on private assets

Klarna, which is known for its popular buy now, pay later business, said Wednesday it has confidentially filed IPO documents with the SEC. Analysts recently valued the company in the $15 billion range. Klarna investors include SoftBank, Sequoia Capital and London-based firm Atomico.

Buy now, pay later provider Klarna says it filed confidentially for U.S. IPO

In the summer of 2022, a young marketing executive in London, eager to revamp her wardrobe, clicked “Pay in 4” at checkout. The process was seamless—no credit check, no hassle, and most importantly, no immediate cash outflow. Fast forward six months, she found herself juggling payments across three different BNPL providers, struggling to keep up as late fees and missed payment penalties mounted. Her story is not unique. BNPL has redefined consumer credit, offering frictionless financing at the point of sale. But beneath its convenience lies a pressing concern—are we enabling financial empowerment, or are we simply repackaging debt in a more palatable way?

The BNPL Boom: The Good, The Bad, and The Regulatory Challenge

Prospect, an $8 billion private credit fund, saw $417 million in realized losses for the year ended on June 30, up from $41 million the year before, according to regulatory filings. About $181 million in realized losses were tied to a single investment in PGX Holdings Inc., also known as Progrexion, which filed for bankruptcy in 2023.  S&P said it revised its outlook because of concerns over levels of non-accruals, or loans on which lenders are at risk of losing money, and payment-in-kind income, which it said was higher than its peers. While S&P kept Prospect’s rating steady at BBB-, the lowest tier considered investment-grade, it said it could downgrade the rating if portfolio performance deteriorates.

S&P Puts $8 Billion Prospect Fund on Negative Outlook

BlackRock Inc. (BLK) faces a significant financial setback with its investment in Alacrity, an insurance outsourcing firm, now projected to result in a loss exceeding $600 million. This situation, as reported by Benzinga, comes at a pivotal time as BlackRock prepares for its Q4 earnings release, underscoring the complexities involved in managing investments within the private equity space, especially when burdened with substantial debt. Alacrity’s control has shifted to a consortium of private credit funds, including Antares Capital, Blue Owl Capital, KKR, and Goldman Sachs Asset Management, as part of a restructuring necessitated by Alacrity’s ongoing debt issues. 

Massive $600M Loss Hits BlackRock’s Private Equity Fund

“The first thing is the debt issue, we have a very severe supply-demand problem,” Ray Dalio told CNBC’s Sara Eisen at CONVERGE LIVE in Singapore on Wednesday regarding U.S. debt. Dalio, who was speaking on the same panel as Salesforce CEO Marc Benioff, said this will require the White House to sell a quantity of debt the world is just not going to want to buy. “That’s a set of circumstances that is imminent, OK? That is paramount importance,” he said, adding that most people don’t understand the mechanics of debt.

Ray Dalio warns that mounting U.S. debt problems could lead to ‘shocking developments’

U.S. merchants who use JPMorgan to handle payments can soon add Affirm to their checkout pages, according to a release. Consumers will have access to loans ranging from 30 days to 60 months, according to Affirm. The deal follows a similar announcement from rival Klarna last month, in which the Swedish fintech said it would be available to JPMorgan’s merchants.

Affirm announces JPMorgan Chase merchants can soon offer installment loans at checkout

Interest rates are coming down, but only after one of the most brutal monetary tightening periods in modern history. And they’re probably coming down too late, too little and too slowly for a lot of smaller companies and the investment funds that chucked money at them over the past few years. Private credit — basically, bilateral corporate loans made by specialist investment funds rather than banks — has been one of the hottest asset classes over the past decade. Possibly the hottest. Depending on who you believe, there’s somewhere between $2tn and $3tn of money in private credit funds.


How is private credit weathering its first big rate hiking cycle?

HPS Investment Partners could hardly be more different than its suitor, BlackRock. Whereas BlackRock, an $11.5tn powerhouse, is best known for investing clients’ funds across huge swaths of public markets, HPS has earned a windfall on targeted bets in the private lending sector. BlackRock’s more than $12bn deal for HPS earlier this month comes as the world’s biggest asset manager is seeking to compete with groups such as Blackstone and Apollo, which are already deeply entrenched in a market widely seen as one of the next major battlegrounds in finance. 



Why BlackRock is shelling out $12bn for private credit shop HPS

A group of private credit lenders led by Blue Owl Capital and Ares Management has agreed to take over troubled software company Pluralsight, wiping out $4bn that Vista Equity Partners and other investors had put into the business since they bought it less than four years ago. The closely watched restructuring is one of the biggest in which the creditors that ultimately take control are also so-called direct lenders. The deal values Pluralsight at about $900mn, far below the more than $5bn that Vista, its partners and private lenders had invested or lent to the business. Vista and its co-investors had sunk roughly $4bn into Pluralsight, while lenders provided it with about $1.7bn of debt financing.


Vista and co-investors lose $4bn in Pluralsight restructuring

Blackstone (BX.N), beat Wall Street's expectations on its key quarterly earnings metric on Thursday, as the world's largest alternative investment firm's assets under management (AUM) hit a record $1.1 trillion and the value of its funds rose. New York-based Blackstone said it saw $41 billion of inflows during the third quarter, while it deployed and committed $54 billion of capital - the highest in over two years - amid a revival in dealmaking activity as the U.S. Federal Reserve cut rates and the economic outlook remained sanguine. Over the past few quarters, high interest rates had been a drag on some aspects of Blackstone's business. With the Fed now entering into an easing cycle, the firm saw that weight starting to lift.

Blackstone tops profit estimate as its assets hit record, dealmaking picks up

Investment bankers are gearing up for a pickup in dealmaking activity in global equity capital markets this year, buoyed by a promising pipeline of anticipated initial public offerings of several high-profile companies. Liquefied natural gas producer Venture Global, privately held medical supply giant Medline, and cybersecurity company Sailpoint, backed by private equity firm Thoma Bravo, are expected to headline a crowded line-up of stock market flotations in the first half of 2025, according to people familiar with the matter. Private equity firms have been struggling to sell or list portfolio companies over the past two years due to high interest rates and volatile stock markets that put a chill on dealmaking.

Bankers hope for IPO revival in 2025 as high-profile listings stack up

Americans’ feelings about the US economy remain in the doldrums after President Donald Trump’s tariffs: Consumer sentiment continued its freefall this month, settling in at a near-record low. The University of Michigan’s closely watched consumer sentiment index fell 2.7% to a preliminary reading of 50.8 for May, dropping further from April’s reading of 52.2. May’s preliminary reading, the second-lowest on record, landed a touch above the all-time low of 50 notched in June 2022, when inflation was at a 41-year high.

Americans’ optimism about the economy is at a near-record low

Major private equity firms have faced significant obstacles in selling or listing their China-based portfolio companies in 2023, with Beijing’s tightening restrictions on IPOs and a decelerating economy having left foreign investors’ capital effectively trapped, according to a report by the Financial Times. Citing data from Dealogic, the report reveals that none of the 10 largest global private equity groups operating in China have successfully listed a Chinese company or fully exited through M&A this year. This marks the first such occurrence in over a decade, though the pace of exits has been sluggish since Beijing imposed restrictions on Chinese companies’ overseas listings in 2021. 

Blackstone, KKR, CVC curbed by China’s IPO clampdown

Americans express rising alarm over economy and job prospects as Trump’s tariffs weigh on outlook. Wall Street stocks dropped on Friday as signs of strain among American consumers added to worries the US is heading for a bout of stagflation. A batch of data added fresh evidence that consumers are growing deeply concerned about how President Donald Trump’s sweeping tariffs will affect the world’s largest economy, while a separate report showed the Federal Reserve’s preferred inflation measure rose in February. 


US stocks tumble as consumer gloom raises stagflation fears

State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), announced today that it is working with Apollo Global Management, Inc. (NYSE: APO), a leading provider of alternative assets and retirement solutions, and its affiliates (collectively, Apollo), to expand investor access to private market opportunities. "Private assets are one of the fastest growing sectors of the financial industry. We are excited to be working with Apollo, a global leader in alternative assets, to continue to increase accessibility to private markets, opening them to an even larger cross section of investors," said Ron O’Hanley, president and chief executive officer of State Street. 

State Street Global Advisors and Apollo Global Management Join Forces to Increase and Broaden Investor Access to Private Markets

BlackRock has a handshake deal to buy private credit group HPS Investment Partners, the Financial Times reported on Wednesday. The final deal value would be closer to $12 billion, which offers a significant premium over HPS's post-IPO valuation of $10 billion, the report said, citing two sources familiar with the matter. The two sides have agreed on the broad outline of the deal with an eye towards announcing general terms after the U.S. Thanksgiving holiday, the report added, citing four people familiar with the matter.

BlackRock has deal to buy private credit manager HPS, FT reports

Recent and upcoming rate cuts will provide relief for private credit borrowers through lower funding costs in 2025, even as many have already benefitted from repricing and improving financing conditions. 

How This Will Shape 2025 
Repricing will continue to change market dynamics. Companies should see a bigger benefit from rate cuts in 2025 than this year. Competition and convergence between public and private markets will continue. With growth and innovations in private markets, some borrowers have the luxury of choice between broadly syndicated or private credit. 

Private Markets: How Will Private Credit Respond To Declining Yields?

 Inflation in the euro area rose from 1.7% to 2% in October, flash figures showed Thursday, coming in slightly higher than the 1.9% forecast. Core inflation and services inflation were both unchanged on the previous month. Markets currently expect the European Central Bank to cut interest rates by another 25 basis points in December, with one analyst saying the latest data would end debate over whether a larger 50-basis-point cut is warranted.

Euro zone inflation rises to higher-than-expected 2%, weakening case for jumbo rate cut

The Fed doesn't need to cut rates, according to JPMorgan Asset Management's Bill Eigen. The bond market veteran said the economy was running too hot for further rate cuts. Markets also look too frothy to support Fed cuts, he added, pointing to sky-high stock prices. The Federal Reserve may not have as much room to cut interest rates as it thinks, and central bankers would be better off skipping another decrease in December, according to one JPMorgan bond expert.



The Fed shouldn't cut rates as inflation is rising, markets are too frothy, JPMorgan Asset Management bond expert says

Higher interest rates and lower consumer spending are squeezing debt-laden companies backed by private equity groups, forcing them to either restructure through bankruptcy or buy time to recover via out-of-court settlements with creditors. The stress on private equity-backed companies shows up starkest in a recent study by S&P Global Market Intelligence, which shows that a record number of 110 private equity and venture capital-backed companies filed for bankruptcy in 2024. 


‘Leveraged to the hilt’: PE-backed firms hit by wave of bankruptcies

The majority of public pension funds and sovereign wealth funds (58%) expect to increase their infrastructure allocations over the next 12 to 24 months, according to the OMFIF’s Global Public Funds 2024 report. The Official Monetary and Financial Institutions Forum is a forum for central banking, economic policy and public investment. Twenty-eight global public funds with a combined $6.5 trillion in assets. This is up from 53% that had the same expectation in last year’s survey and 42% in 2022. 

Most global public funds plan to increase infrastructure allocations — OMFIF report

In October 2022, shortly after Credit Suisse launched a major business restructuring and the credit-rating agencies announced they were downgrading the Swiss bank’s debt, adding to the turmoil that was engulfing the then 166-year-old financial institution. One of the immediate steps the bank took in response to the waning confidence in it was to accelerate the sale of the bulk of one of its crown jewels, the so-called securitised products group, a large asset-based lending business that created — or “originated”, in financial jargon — products such as mortgages and auto loans and sold them to investors.



The deal that has spurred Apollo’s plan to remake Wall Street

A leading economist contends a recession is now more likely than not due to the Trump administration’s trade wars, and that the U.S. could suffer the biggest “stagflationary” shock in decades. “We may get recession, we may not, but we are going to get inflation either way,” said Adam Posen, a former official at both the Federal Reserve and the Bank of England, in a speech this week.The influential Posen, now the president of the Peterson Institute for International Economics, put the odds of recession at 65%.

This top U.S. economist puts the chance of a 'stagflationary' recession at 65%

The U.S. economy is experiencing a noticeable slowdown in mid-2025, with sluggish domestic demand growth, muted job gains, and new tariff actions poised to impact both inflation and overall economic momentum, according to a recent analysis from UBS Global Research.

UBS sounds the alarm on ‘stall speed’ as the economy shows signs of running out of gas

State Street Global Advisors' much-anticipated private credit exchange-traded fund, developed with alternative investment firm Apollo Global Management, began trading on the New York Stock Exchange on Thursday. The SPDR SSGA Apollo IG Public & Private Credit ETF is the first product offering retail investors direct access to a diversified portfolio of private credit assets.

State Street launches Apollo private credit ETF

The central bank reduced its key interest rate from 4.5% to 4.25% on Thursday amid a backdrop of lackluster economic growth and uncertainty around President Donald Trump’s trade tariffs. The move is likely to bring relief to borrowers, businesses and hard-pressed consumers across the country. Five of the BOE’s nine policymakers voted for the cut, with two members wanting a larger 50 basis-point reduction, and two wanting to keep rates on hold.

Bank of England cuts interest rates: Here’s what it means for your money

Meta Platforms (NASDAQ:META) is attempting to raise $29B to help fund its ambitious artificial intelligence data center build out, according to the Financial Times. Apparently, Meta has been in talks with Apollo Global Management, KKR, Brookfield, Carlyle and Pimco, the report said, citing people familiar with the matter. Meta plans to raise $3B of equity from private investment firms and another $26B in debt. However, it is still considering multiple options. Meta might also attempt to raise more capital. The social media giant is trying to find ways to make the debt easily tradable after it is issued. Meta is also pursuing its AI goals in other ways. 

Meta pursues $29B fundraising goal to help pay for AI data centers: report

JPMorgan believes the US economy will enter a recession in the back half of 2025 as the impact of President Trump tariffs takes hold in the economy. The firm's chief US economist Michael Feroli sees a two-quarter recession occurring in the back half of 2025 as GDP contracts by 1% in the third quarter of the year and by 0.5% in the fourth quarter. For the full-year 2025, Feroli's team projects GDP will fall by 0.3%. "We now expect real GDP [gross domestic product] to contract under the weight of the tariffs," Feroli wrote in a note to clients on Friday night.

JPMorgan becomes the first Wall Street bank to forecast a US recession following Trump's tariffs

The Federal Reserve held its key interest rate unchanged in a range between 4.25%-4.5%, where it has been since December. The post-meeting statement noted the recent market volatility and how that is factoring into the central bank’s policy decisions. “Uncertainty about the economic outlook has increased further,” the statement said.

Fed holds rates steady as it notes rising uncertainty and stagflation risk

Tariffs should be pushing the dollar higher, but instead, the U.S. currency is weakening on Tuesday. Some see cause for concern. Global stocks struggled on Tuesday as President Donald Trump’s latest batch of tariffs took effect, targeting Canada, Mexico and China. But even more troubling, according to some, was the reaction in the U.S. dollar.  In the past, when the U.S. has slapped tariffs on trading partners, the dollar has typically strengthened. Stephen Miran, Trump’s nominee to lead the president’s Council of Economic Advisers, said the tariffs imposed against China during Trump’s first term in office helped weaken the renminbi, China’s currency, which offset the impact of the new levies on consumer prices.

The U.S. dollar is sending an alarming signal to investors and consumers

A Lending Tree survey found 25% of buy now, pay later users are funding grocery purchases with the loans, up from 14% in 2024.  The survey said 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior. The figures are the latest evidence that some consumers are having trouble affording essentials such as groceries under the pressure of high prices and interest rates.

More Americans are financing groceries with buy now, pay later loans — and more are paying those bills late, survey says

Gross domestic product fell at a 0.3% annualized pace, largely pushed by a surge in imports ahead of President Donald Trump’s tariffs. Imports soared 41.3%, driven by a 50.9% increase in goods. Imports subtract from GDP, so the contraction in growth may not be viewed as negatively given the potential for the trend to reverse. The report provided cross signals for the Fed. While the negative growth number might push the central bank to consider lowering interest rates, inflation readings could give policymakers pause.

U.S. economy shrank 0.3% in the first quarter as Trump policy uncertainty weighed on businesses

Private credit exists as an essential part of the capital spectrum, especially for firms that cannot get, or choose not to get, traditional bank channels. The private credit firms — including venture capital companies, buyout funds, hedge funds, direct lenders and others — are in turn significant partners for FinTech platforms that, themselves, extend loans. The capital flows that connect banks, private credit firms, FinTechs and the latter’s end customers is increasingly interwoven, with risks and rewards extending across that continuum. 

Platforms, Private Credit Fund and Banks’ Fortunes Are Increasingly Intertwined

There was plenty of enthusiasm for the fundraising and dealmaking outlook at this year’s SuperReturn conference of private equity professionals, but also an acknowledgment that the IPO market has stalled — in large part due to U.S. volatility. A slowdown in exits has left investors in PE funds unable to realize returns and potentially looking for alternatives. “A lot of PE firms just paid too much” during the era of ultra-low interest rates, one attendee noted, but added that “at some point that has to pass.”

Peak private equity? Sector gets defensive about its ability to generate top returns

The Bank of England held interest rates at 4.25% as expected on Thursday but said it was focused on risks from a weaker labour market and higher energy prices as conflict in the Middle East escalates. Noting the elevated global uncertainty and persistent inflation, the Monetary Policy Committee voted 6-3 to keep rates on hold, with Deputy Governor Dave Ramsden joining Swati Dhingra and Alan Taylor to vote for a quarter-point reduction.

Bank of England keeps rates steady, sees further loosening as jobs market weakens

Investors looking for more solid longer-term returns should be looking at credit — and not banking on the S&P 500 to get them there, according to billionaire investor Howard Marks. 
“From the S&P, you’re not going to get the historic return of 10% a year for the next decade. You will get something less and if that’s true, then the returns described from credit are quite competitive and dependable,” Marks, co-founder and co-chairman of Oaktree Capital Management, said in an interview with India’s Economic Times published Friday.

Howard Marks expects a lower return from the S&P 500 over the next decade. Here’s what he likes better.

Initial unemployment claims posted an unexpected increase last week in a potential trouble sign for the wobbling U.S. economy. First-time filings for unemployment insurance totaled 241,000 for the week ending April 26, up 18,000 from the prior period and higher than the Dow Jones estimate for 225,000, the Labor Department reported Thursday.

Weekly jobless claims surge to 241,000, more than expected, in latest sign of economic trouble

Moody's downgraded the U.S. sovereign credit rating on Friday due to concerns about the nation's growing, $36 trillion debt pile, in a move that could complicate President Donald Trump's efforts to cut taxes and send ripples through global markets. Moody's first gave the United States its pristine "Aaa" rating in 1919 and is the last of the three major credit agencies to downgrade it. Friday's cut by one notch to "Aa1" follows a change in 2023 in the agency's outlook on the sovereign due to wider fiscal deficits and higher interest payments.

Moody's cuts America's pristine credit rating, citing rising debt

The Federal Reserve proposed easing a key capital rule for banks, and central bank officials opened the matter for public comment Wednesday. The enhanced supplementary leverage ratio regulates the quality and quantity of capital banks should keep on their balance sheets. In recent years as bank reserves have grown, Wall Street executives and Fed officials have sought to roll back the requirements.

Divided Fed proposes rule to ease capital requirements for big Wall Street banks

Tom Lee has been appointed chairman of the board of directors of bitcoin miner BitMine Immersion Technologies, effective Monday. BitMine announced a $250 million private placement to implement a buying strategy around ether, which it aims to make its primary treasury reserve asset. Lee’s appointment comes amid a groundswell of interest from traditional financial institutions around stablecoins, many of which run on the Ethereum network.

Wall Street strategist Tom Lee is aiming to create the MicroStrategy of Ethereum

BlackRock announced it’s completed the acquisition of HPS Investment Partners (HPS), a global, credit-focused alternative investment firm. Financial details were not disclosed in the release. Private credit is reshaping financial markets and the structural trends supporting its growth have accelerated the convergence of public and private markets. Financing activity is being shifted toward the capital markets, positioning asset managers to match long-dated capital with long-term investors, including insurance companies, pensions, sovereign wealth funds, wealth managers, and individuals saving for retirement.

BlackRock announces $190bn financing unit for private-public markets convergence

Private equity firms including Apollo Global, KKR, Blackstone and Brookfield are accelerating efforts to make low-risk loans, encroaching on territory dominated by banks and public debt markets. New York-based group Apollo on Thursday increased its long-term forecasts for its lending business, telling shareholders it expected to be able to originate more than $200bn a year in new loans, up from $150bn previously. This compares with $97bn issued last year including to investment grades European group Vonovia and Air France-KLM. Volumes reached a record $40bn in the first quarter of 2024, it said.


Private equity firms step up plans to edge banks out of low-risk lending

The Consumer Financial Protection Bureau declared on Wednesday that customers of the burgeoning buy now, pay later industry have the same federal protections as users of credit cards. The agency unveiled what it called an “interpretive rule” that deemed BNPL lenders essentially the same as traditional credit card providers under the decades-old Truth in Lending Act. The BNPL market is dominated by fintech firms like Affirm, Klarna and PayPal.

CFPB says buy now, pay later firms must comply with U.S. credit card laws

JPMorgan Chase CEO Jamie Dimon said private credit could spark turmoil if the opaque sector of financial markets weakens. "There could be hell to pay," he said at a conference on Wednesday. "I've seen a couple of these deals that were rated by a rating agency and, I have to confess, it shocked me what they got rated. So, it reminds me a little bit of mortgages."

Jamie Dimon says there could be 'hell to pay' if the swelling private-credit market starts showing cracks

It seems JPMorgan CEO Jamie Dimon can’t see a way ahead for the U.S. economy that doesn’t end in stagflation.  It’s a warning Dimon has issued before, previously saying he fears America is headed for a repeat of the 1970s when everything “felt great” and then quickly about-turned to a period of high unemployment and inflation paired with low demand, also known as “stagflation.” Appearing at AllianceBernstein’s Strategic Decisions conference on Wednesday, Dimon said he simply can’t see how the past five years of massive fiscal and monetary stimulus could result in anything other than this scenario. 

How can you tell me it won’t lead to stagflation?’ Jamie Dimon says ‘extraordinary’ government spending has him bracing for high inflation and unemployment

After months of business leaders and economists urging action, the People’s Bank of China (PBoC)—the central bank of the world’s second biggest economy—finally acquiesced, unleashing a triptych stimulus package aimed at spurring consumer spending to counter persistent deflation. Yet analysts doubt even this “policy bazooka” will have much of an effect. 
On Tuesday, the PBoC unveiled a policy interest rate cut of 0.2 percentage points, combined with a lowering of banks’ reserve requirements and the cutting of existing mortgage interest rates, both by 0.5 percentage points. For the PBoC to unveil three rate cuts at once is itself unprecedented. 

China’s Bold Stimulus Measures Won’t Save Its Flagging Economy

Private investment group Sixth Street will pump $4bn into a vehicle to buy loans from US fintech Affirm in a deal that will give the lender firepower to make billions of dollars in additional consumer loans.The pact, which is expected to give Affirm the ability to make $20bn in new loans in the next three years, is the latest tie-up between a private credit fund and consumer credit provider, as the industry taps new avenues to lend to Americans struggling from years of high inflation.The structures allow companies such as Affirm and Sweden-based Klarna — which specialise in “buy now, pay later” loans — to offload debt they have underwritten from their balance sheets, shifting the risks to investors. 


Sixth Street pact hands Affirm firepower for $20bn in new consumer loans

Regional banks around the U.S. are striking complex and costly bargains with hedge funds, hoping to insulate themselves from a replay of the turmoil that followed Silicon Valley Bank’s failure last year. Wall Street smells a payday. Ohio-based Huntington Bancshares recently entered into an arrangement to sell investors some of the risk that its borrowers won’t repay their loans. That helps the bank meet new proposed standards meant to make lenders look healthy to regulators.  The deal is known on Wall Street as a synthetic risk transfer, and it offers cash-flush, private-debt fund managers—such as Ares Management and Blackstone—an attractive investment. 

Regional Banks Want to Slim Down. Hedge Funds Smell a Bargain.

Blackstone plans to double the size of its European private credit fund in the next year after raising €1bn from the region’s rich to invest in the booming $1.7tn market in private corporate loans. The private equity giant has taken nearly two years to reach the milestone following the 2022 launch of its European Private Credit Fund, known as ECRED, which aims to replicate the success of its $54bn US flagship fund.


Blackstone draws €1bn into European private credit fund

The Bank of England joined the growing list of policymakers and market participants concerned about the booming $1.6-trillion private credit market. The central bank’s Financial Policy Committee on Wednesday highlighted riskier types of corporate borrowing such as private credit and leveraged lending as particularly vulnerable to “sharp revaluations” in credit markets, as higher interest rates could make it harder for companies to refinance debt.

Bank of England Issues Warning on Private Debt, Leveraged Loans

Sports investment group Arctos Partners is in advanced talks to buy a majority stake in European credit investment shop Hayfin Capital Management in tandem with its top executives, according to people with knowledge of the matter.  Arctos has partnered with top Hayfin executives, including co-founders Tim Flynn and Mark Tognolini, in the deal, which is expected to hand a majority of the common stock owned by the British Columbia Investment Management Corporation (BCI) to the management team when it is completed. 


European credit group Hayfin Capital nears buyout deal

Calpers is expanding its private equity portfolio following its strongest fiscal year since 2021, reporting an 11.6% return and reaching $556.2bn in total assets under management, according to a report by the Financial Times. The US’s largest public pension fund has increased its target allocation to private equity from 13% to 17%, with the asset class now accounting for nearly 18% of its portfolio. Private equity returned 14.3% for the year, up from 10.9% in the prior period, and rebounding from a loss the year before. 

Calpers deepens private equity exposure after strong $556.2bn performance year

Private equity firms made record use of a controversial tactic to cash out their clients by selling assets to themselves in the first half of the year, as they struggle to find external buyers or list holdings. Buyout groups used so-called continuation funds — in which a private equity group sells assets from one of the funds they manage to a fresher fund also managed by the firm — to exit $41bn of investments in the first six months of 2025, according to a report by investment bank Jefferies. That was equal to a record 19 per cent of all sales by the industry, and 60 per cent higher than a year ago.


Private equity firms flip assets to themselves in record numbers

The European Central Bank on Thursday kept interest rates steady amid major economic uncertainty, as the European Union scrambles to negotiate a trade agreement with the U.S. before the end of the month. The ECB has cut interest rates at each of its four meetings so far this year, taking its key deposit facility from 3% in January to 2% in June. Last year it reduced rates from a record high of 4%. “The environment remains exceptionally uncertain, especially because of trade disputes,” the ECB said in a statement.

European Central Bank holds interest rates as tariff turmoil keeps policymakers on edge

Treasury Secretary Scott Bessent on Thursday expressed confidence that the U.S. and China are on the way to trade pact as a key tariff deadline nears. “I believe that we have the makings of a deal,” Bessent said during an interview on CNBC’s “Squawk Box.” “There’s still a few technical details to be worked out on the Chinese side between us. I’m confident that it will be done, but it’s not 100% done.” Bessent did not provide any details on what a final deal with China would look like.  

Treasury Secretary Bessent says ‘we have the makings of a deal’ with China

The ‘private credit is a systemic risk’ drumbeat has grown over the past year, with the likes of the Boston Fed, Moody’s Analytics and the IMF publishing vaguely ominous reports lately. 
Even Barclays got in on the action, with a big report that estimated that lending to “non-bank financial institutions” now account for over 10 per cent of all US bank loans. It argued that this was in practice supplanting traditional commercial bank lending, and could cause problems if it continued to grow at the same pace.

Four reasons why private credit isn’t actually a systemic risk

President Trump signed a pair of executive orders Thursday intended to reshape the world of banking and high finance—some in ways Wall Street likes, and others it feared. One order seeks to make it easier for everyday Americans to invest their retirement savings in assets that lie outside public markets, such as private equity, cryptocurrency and private real estate. The move fulfills a long-sought goal of Wall Street hedge funds and private-equity firms, which for years have wanted to tap in to the giant pool of money in 401(k) and other defined-contribution plans. 

Trump Shakes Up Wall Street With Orders on 401(k)s, ‘Debanking’

Retail sales last month rose 3.7% from a year earlier, sharply missing analysts’ estimates for a 4.6% growth. Industrial output rose 5.7% from a year ago in July, its weakest level since November last year. Fixed-asset investment expanded 1.6% this year as of July, slowing from 2.8% in the first six months.

China’s growth stumbles in July as retail sales, industrial output miss forecasts

Individual investors account for just 5 – 10% of private market investments, with institutional players comprising the overwhelming majority. It’s a striking disconnect, and one that’s inspiring quite a debate in personal finance. A new generation of investors, particularly those in the HENRY category (High Earning, Not Rich Yet), are starting to question the conventional wisdom that has long kept them locked into public stocks and bonds. And it’s hard to blame them.  The HENRY category is educated, digitally savvy, and earning upwards of six figures. But despite their progress on the salary ladder, many feel stuck and frustrated that traditional investment options seem increasingly inadequate in helping them achieve their financial goals.

Beyond Democratising: How Private Investing 2.0 is Shaping

Private credit funds are drawing in record sums of capital from everyday investors, offsetting a slowdown from large institutions as wealthy individuals are lured in by the higher returns on offer. Affluent individual investors in the US have pumped $48bn into private credit funds in the first half of this year, already surpassing the entire haul in 2023 and on pace to eclipse the high-water mark of $83.4bn set in 2024, according to investment bank RA Stanger.


Wealthy Americans pour record sums into private credit funds

The S&P 500’s march to a record high this year hasn’t come cheap: By some measures, stocks have never been pricier. Investors are now paying more than ever for each dollar of revenue the index’s members produce. The benchmark traded at 3.23 times sales on Thursday, a record high. 
Price-to-earnings ratios aren’t quite at records—thanks to juicy profit margins at many of the index’s most valuable companies—but they still sit at the extreme end of history. The S&P 500 currently trades at 22.5 times its projected earnings over the next 12 months, compared with the average of 16.8 times since 2000.

U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era

Global long-term bond yields are surging, with U.S. 30-year Treasuries near 5% and U.K. gilts above 5.7%, as investors grow wary of mounting debt and political pressure on central banks. Safe-haven gold has hit a record $3,537, while economists told Fortune the bond market “can’t be primaried,” underscoring that investors will pull back if fiscal credibility deteriorates.

The canary in the coal mine is singing as global bond selloff raises national debt concerns

Carlyle Group has raised $20bn to acquire ageing private equity stakes at a discount from pension funds and other investors. The private capital group said on Thursday that its AlpInvest unit had raised $15bn for its latest flagship secondaries fund, almost double the $9bn amassed by its predecessor in 2020. AlpInvest, which raised a total of $20bn when also including co-investments from other groups and its retail funds, has become Carlyle’s fastest source of asset growth.


Carlyle raises $20bn to scoop up ageing private equity stakes

Credit rating agency Fitch downgraded France's sovereign credit score on Friday to the country's lowest level on record, stripping the euro zone's second-largest economy of its AA- status as it grapples with political crisis and ballooning debt. The move, bringing Fitch's score to A+, heaps pressure on Prime Minister Sebastien Lecornu just days into the job as he scrambles to form a cabinet and draft a 2026 budget that can pass a deeply divided parliament.

Fitch downgrades crisis-strained France

Loans raised by a privately held US car parts maker plunged on Friday, inflicting more than $1bn of paper losses on lenders as they ready for what is expected to be a messy debt restructuring. Senior loans issued by First Brands Group changed hands at about 45 cents on the dollar, a distressed price that suggests investors are sharply writing down their expectations that the debt will be paid back. Junior loans, which are riskier than their senior counterparts because they provide holders with fewer rights to recover their money in the case of bankruptcy, were quoted between 16 and 21 cents on the dollar, according to a source familiar with the matter.


First Brands debt plunges as worries mount over US car parts group

Tricolor’s bankruptcy trustee is designating a servicing company to search for vehicles and unfreeze payment systems following the auto lender’s sudden collapse. Dallas-based Tricolor Holdings offered auto financing to customers who lacked credit history or a social security number before it abruptly filed for a bankruptcy liquidation amid a bank partner’s allegations of fraud. 

Collapse of Subprime Lender Tricolor Kicks Off Scramble for 100,000 Car Loans

Private equity investors know that not every portfolio company will double or triple in value. And for really good PE funds, outsized returns from their winners will more than carry the remainder that turn out to be either a bit meh, or a totally urgh.  But private creditors who lend money to portfolio companies couldn’t give a monkey’s if the firms they lend to double or triple in value. All they want to know is whether they’ll get their money back. As such, they care a lot whether companies bomb so badly that they’re unable to repay their loans.


How bad could private credit default rates get?

A Goldman Sachs investment vehicle plans to quit the London Stock Exchange, having struggled to attract investor interest since going public four years ago. Goldman founded Petershill Partners in 2007 and listed the company’s shares in an initial public offering in 2021, promising investors access to the fast-growing alternative asset-management industry. Petershill owns stakes in two dozen relatively small private-equity firms and hedge funds, earning a slice of their investment profits and management fees. Its stock had fallen more than a third since its IPO. Partly, that reflects a broader trend in the private-equity industry: Investors are gravitating toward giants such as Apollo and Blackstone, and steering clear of smaller players.

Goldman Sachs Investment Vehicle Set to Delist in London

The speed at which US car parts maker First Brands Group unravelled has shocked Wall Street.
The privately held group’s longtime bankers at Jefferies were marketing a $6bn loan deal to investment funds less than two months ago on the basis that the multinational conglomerate was in no immediate peril, with more than $1bn of cash and other sources of liquidity to hand. First Brands on Sunday filed for Chapter 11 protection, disclosing more than $10bn in total liabilities but with the full extent of its off balance sheet financing still unclear.  The bankruptcy could result in billions of dollars of losses for some of the biggest players in private debt markets. 



First Brands bankruptcy: the losers — and winners

Auto-parts supplier First Brands crashed into bankruptcy last month. Now, banks are sifting through their exposure to the company and its chain of customers and suppliers. Jefferies Financial on Wednesday said funds run by an asset-management unit, Point Bonita Capital, are owed around $715 million from companies that bought First Brands’ parts. UBS in bankruptcy court filings said funds it operates, including through its recently sold O’Connor hedge-fund unit, have around $500 million exposure. The exposure is also mainly to customers that owe First Brands money, a person familiar with the matter said. 

First Brands Bankruptcy Damage Spreads to Jefferies, UBS

The stockmarket is not the economy, as the old investing cliché goes. That is obvious enough to anyone paying attention in America this year. President Donald Trump’s tariff fervour has dented growth, even if not by as much as expected after “Liberation Day”, and yet the stockmarket has soared: the S&P 500 index of large American companies is up by nearly 15% so far this year, comfortably ahead of the historical average.  But does the stockmarket power the economy? At most points in time, it would be a ridiculous question. In recent months, though, the rise in American share prices has coincided with, and been fed by, a rush of popular enthusiasm for investing. And as people see the line go up, they become more likely to spend. 

The stockmarket is fuelling America’s economy

“I probably shouldn't say this, but when you see one cockroach, there are probably more.” Jamie Dimon, boss of JPMorgan Chase, America’s biggest bank, offered a warning on October 14th that the recent blow-ups of Tricolor, an auto lender, and First Brands, a car-parts-maker, might not be the last problems faced by America’s credit market.  Investors did not have to wait long for the next bug to crawl into view. Shares in America’s regional banks dropped by 6% on October 16th. 

Why Wall Street is fearful of more lending blow-ups

Subprime lender PrimaLend Capital Partners filed for bankruptcy protection on Wednesday, in another sign that low-income consumers in the United States are under strain. The company's filings in a Texas court showed that it listed both assets and liabilities of less than $500 million. PrimaLend provides financing to consumer and specialty lenders through asset-based credit facilities. It also serves the "buy-here-pay-here" auto financing market, where dealers sell and directly finance vehicles for customers with poor or limited credit.


Subprime lender PrimaLend Capital Partners files for bankruptcy protection

Huntington Bank will acquire Texas- and Mississippi-based Cadence Bank in a $7.4 billion, all-stock transaction that’s expected to close in the first quarter of 2026, the banks said Monday. It’s the second Texas-related acquisition this year for $223 billion-asset Huntington. The Columbus, Ohio-based regional acquired Dallas-based Veritex Community Bank for $1.9 billion; that deal closed last week.  Cadence, which has $53 billion in assets, has dual headquarters in Houston and Tupelo, Mississippi. The bank has about 390 branches and 1 million customers across Texas, Mississippi, Alabama, Arkansas, Florida, Georgia, Louisiana, Missouri and Tennessee.

Huntington to buy Cadence Bank for $7.4B

The Trump administration’s looser rules could breed more ‘cockroaches’ in the lending market. Rising investor demand for private fixed-income products has stoked competition among lenders to offer attractive loans and package them up into various forms of securities. That in turn allows companies and consumers of all stripes to borrow on generous terms, and is helping to spark a return of buyout fervour.


Deregulation will pour extra fuel on the private credit bonfire

The tally of “zombie companies” in the US that aren’t earning enough to cover their interest expenses stands at the highest since early 2022, with almost 100 gaining the designation in October. The main reason: Companies that gorged on debt at near-zero interest rates in the pandemic era have since been hurt by tariffs and higher funding costs. The odds of getting much relief on either front aren’t improving, with the US signing trade deals that lock in some of the higher tariffs and the Federal Reserve signaling that it might not continue to cut rates at its December meeting. Zombies will have to take steps to fix their balance sheets, such as boosting earnings or arranging costly new financing, or potentially face default.

The Ranks of Corporate Zombies Are Growing: Credit Weekly

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