The private credit market raises many questions, and its lack of transparency is not helping. Official public data remain scarce. The available estimates come mainly from private sources, whose methodologies vary widely. The Financial Accounts of the Federal Reserve (Fed) now shed new light on the matter. They reveal that private credit finances 7.1% of US corporate debt through households (31% of funds’ total financing), insurers and pension funds (20%), and banks (19%).
Who finances US private credit funds?
Private credit can take several forms. The most common is loans granted by closed-end funds[1] to small and medium-sized, unlisted and highly indebted companies. These loans are generally variable-rate, with flexible terms based on cash flow rather than a measure of profitability. While this asset class has inherent vulnerabilities[2] (Bank of France, 2025), it is also particularly well-suited to financing innovative and long-term projects (such as digital[3], infrastructure, renewable energy and healthcare), especially when combined with an equity stake in the company. Its slower growth in Europe likely explains, in part, the region’s lag in innovation financing.
Private credit finances 7.1% of US corporate debt…
Private credit has grown rapidly in the United States over the past decade and has established itself as an alternative to bank loans for a category of borrowers. It now accounts for 17.3% of the total outstanding loans to American non-financial corporations (NFCs)[4] and 7.1% of their debt. Approximately one-third (35%) is managed by strictly closed-end funds, with another third (36%) by semi-open-end funds that allow occasional early redemptions. The remaining third is held on the balance sheets of non-resident private debt funds (25%) and securitisation vehicles (4%).
… through banks, insurers and pension funds, and households
In yet another example of the lengthening of the credit intermediation chain in the United States (following that of the mortgage market), banks are among the main creditors of private credit funds (65% of their debt and 19% of their total financing). The low risk weighting of loans granted by banks to these vehicles, compared to that of direct bank loans to non-financial corporations, is undoubtedly a factor (Chernenko et al., 2024). The holdings of insurers and pension funds – consisting mainly of shares in strictly closed-end funds – make them among the leading investors in private debt funds (30% of issued shares and 20% of total financing). This asset class offers them the opportunity to diversify their portfolios and attractive returns. The rise of semi-open-end funds has expanded the investor base to include retail investors (31% of total financing), albeit at the cost of increased liquidity risk, as evidenced by the significant wave of redemptions in late 2025 and early 2026[5]. American households directly hold 70% of the equity issued by semi-open funds and 22% of the shares issued by strictly closed funds[6].
Abbassi, P., Aldasoro, I., and Doerr, S. (2026), Financing the digital economy: the role of private credit, BIS Quarterly Review, September 2026
Banque de France (2025), The reshaping of the credit landscape in light of the development of private debt and Its implications for financial stability, Financial Stability Report, December 2025
Chernenko, S., Ialenti, R. and Scharfstein, D. (2024), Bank capital and the growth of private credit, Working paper
France Invest (2026), Private debt fund activity in France, March 2026
