INTHEBLACK November 2025 - Magazine - Page 35
While private equity accounts
for half of the global private
capital market, private credit
is booming and retail investors
are in on the action.
With less regulatory oversight,
retail investors may have
higher risk than institutional
investors who perform
thorough due diligence.
THE FINANCIAL SYSTEM IS
experiencing a seismic shift. While public
listings in countries like Australia are
at a two-decade low, private capital markets
have expanded as businesses seek alternative
sources of funding and investors eye
diversification and higher returns.
The world of private capital, where debt
and equity are invested in privately owned
companies, was valued at US$11.87 trillion
(A$18.2 trillion) in 2023 and is projected
to hit US$18 trillion (A$27.6 trillion) by 2027.
Private equity, which involves taking an
ownership stake, accounts for nearly half
of the market in Australia, although private
capital fundraising in 2024 was at the
lowest level in a decade. While the venture
Retail investors are wise
to check the track record
of private credit managers,
as well as opportunities for
conflicts of interest.
capital arm of private markets gained muscle
during the tech boom of the early 2000s,
investor sentiment has been more cautious in
recent years. The private market’s third arm,
private credit, is a different story.
The global private credit market, which
involves non-bank lenders raising money
from investors to loan to businesses, has
quadrupled over the past decade to reach
US$2.1 trillion (A$3.2 trillion) in 2023.
Growth was accelerated by the global
financial crisis of 2007–09, when new
regulations nudged banks towards more
low-risk forms of lending.
Once the domain of wholesale and
institutional investors like superannuation
funds and insurers, the broader private
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