Private Credit: Hype, Hazard, or the Next Big Thing? (With Huw Van Steenis, Oliver Wyman)

The rise of private credit and its reshaping of wealth portfolios is examined, questioning whether this trend primarily benefits private asset firms, potentially at the expense of individual investors. Huw Van Steenis, Vice Chair of Oliver Wyman, explains how post-financial crisis regulations pushed riskier, smaller loans from banks to private credit, further propelled by insurance companies seeking higher-quality, investment-grade loans. This has structurally lowered the cost of capital, enabling competitiveness for a broader range of loans, including complex, jumbo, and long-dated deals, particularly in sectors like data centers and AI. The conversation explores the barbell approach to fixed income investing, balancing cheap index funds with higher-risk private assets, and the potential role of technology in democratizing access to these investments through evergreen funds.