According to S&P Global Ratings' latest scenario analysis, private credit portfolios face mounting pressure from the Trump administration's tariff policies, with at least 10% of middle-market companies directly vulnerable to trade disruptions. While the immediate impact may be contained due to the sector's domestic focus, second-order effects including sustained inflation, weakened consumer spending, and market volatility could create significant challenges for highly leverag

The US economy experienced a 0.3% GDP contraction in Q1 2025, its first real decline since 2022, as trade policy uncertainty severely disrupted business planning and market confidence. According to PitchBook's "False Start" Q2 2025 Quantitative Perspectives report, the April "Liberation Day" tariff announcement has shifted the US from expected sustained growth into potentially recessionary territory.

Private credit nearly quadruples market share as tariffs reshape borrowing landscape; 87% of sizeable U.S. companies remain privately held.

As President Trump's tariff policies drive significant market volatility, top firms like Apollo and KKR are aggressively deploying billions while institutional investors face a perfect storm of allocation pressures from both the "denominator effect" (public market volatility) and "numerator effect" (limited distributions from existing private investments).

KKR reported Q1 2025 results on its 49th anniversary, delivering record fee-related earnings of $0.92 per share (up 22% YoY) while deploying over $10 billion in new investments since recent tariff announcements. The alternative asset manager raised $31 billion in new capital during the quarter, showcasing resilience amid market volatility driven by trade concerns.

CREFC's Q1 2025 Sentiment Index fell 30.5% to 87.9, reflecting growing concerns over economic uncertainty triggered by recent trade policies.

PitchBook's Q1 2025 US PE Breakdown reveals robust dealmaking despite growing economic concerns, with Q1 deal value reaching $259.7 billion, up 24.6% QoQ and 36.1% YoY. Deal count remained steady at 2,263, though exits are struggling to keep pace with the massive backlog of 3,800 PE-backed companies awaiting liquidity.

Private Equity Firms Shift to Survival Mode as Exits Stall

"It is the challenging environments that best showcase the strength and stability of our firm. We built our business to navigate periods of uncertainty and dislocation," said Stephen Schwartzman.

Private debt offers mathematical resilience to recession through high interest income offsetting temporary markdowns, but leverage amplifies initial pain. RetryClaude can make mistakes. Please double-check responses.

Trump's tariff bombshell threatens economic growth but creates opportunity for disciplined credit investors amid the volatility.

Credit investors face a new landscape where trade policy tweets can move markets 1,100 points in a day, forcing a fundamental rethinking of sector and geographic exposure.RetryClaude can make mistakes. Please double-check responses.

Trump's "Liberation Day" tariffs confirm KKR's view that globalization is giving way to regional economic competition.RetryClaude can make mistakes. Please double-check responses.

Apollo CEO sees logic in Trump's tariff goals but warns "damage to the U.S. brand" could be lasting if implementation isn't improved.

President Trump's America First Trade Policy and Fair and Reciprocal Plan could impose significant new tariffs beginning April 2, with China

Geopolitical economic tensions create unprecedented market uncertainty, but private capital growth remains unstoppable with wealth clients