Private credit is a form of non-bank lending in which financing is directly negotiated between borrowers and lenders, rather than originated or traded through traditional banks or public debt markets.
The asset class has expanded rapidly, reaching approximately USD 2 trillion globally, with the Australian market now exceeding AUD 220 billion, underscoring its growing role within the broader financial system.
Through The Art of Markets lens, this growth is not incidental, it is the result of shifting system dynamics and accumulated pressure across traditional channels of capital. As price (interest rates) increased, raising the cost of capital, positioning (bank balance sheets) tightened under regulatory and capital constraints, risk (credit conditions) became more selective and sentiment shifted toward caution in public markets, a structural gap emerged between the demand for capital and the willingness of traditional institutions to supply it. Private credit filled that gap.
