Private Credit Market Far From Peak, Set For Massive Growth

In Brief:

The private credit market is nowhere near its peak despite recent warnings from major bank executives, and is instead positioned for explosive growth that could see it reach $15 trillion within a decade—matching the size of public credit markets. Bruce Richards, founder and CEO of Marathon Asset Management, delivered this bold assessment during a Bloomberg Television interview, directly challenging JPMorgan CEO Jamie Dimon's recent claims that private credit has peaked. Richards oversees a firm that has originated $30 billion in asset-based lending across five vintages and manages significant private credit strategies, giving him frontline visibility into market dynamics. His perspective carries particular weight as someone actively deploying capital in today's environment, where traditional banks are retreating from certain lending activities while private credit funds fill the gap with higher returns and greater flexibility.

Big Picture Drivers:

• Market Convergence: Public and private credit markets trending toward equal $15 trillion sizes

• Bank Competition: Major banks positioning against private credit growth while quietly participating

• Wealth Democratization: Retail investors gaining access to previously institutional-only investments

• Private Equity Expansion: Growing private equity sector driving demand for direct lending

Key Topics Covered:

• Market Size Projections: Current $4 trillion private credit market growth trajectory

• Jamie Dimon Pushback: Disagreement with JPMorgan CEO's "peak" assessment

• Asset-Based Lending: Next major growth segment within private credit

• Regulatory Concerns: Elizabeth Warren's warnings about retail investor access

Key Insights:

• Growth Trajectory: Private credit markets are expanding at 20% annually and will grow from the current $4 trillion to $15 trillion over the next decade, converging with public credit market size.

• Bank Strategy Disconnect: Jamie Dimon's public comments about private credit peaking contradict banks' behind-the-scenes activities, as they increasingly buy and sell private loans while positioning for formal market entry.

• Asset-Based Lending Opportunity: This segment represents private credit's next major growth phase and will eventually exceed direct lending in size within 5-7 years, currently in its infancy compared to future potential.

• Competitive Positioning: Banks want to finance private credit funds' operations rather than compete directly in riskier LBO and opportunistic credit deals, creating partnership opportunities rather than pure competition.

• Return Advantage: Private credit delivers 11-12% net returns with half the volatility of equity markets, compared to equities' 7% historical return, creating superior risk-adjusted performance.

• Wealth Channel Evolution: The democratization of private credit access through wealth management platforms represents a natural progression, especially when retail investors can already day-trade options with higher risk profiles.

Memorable Quotes:

• "We all love Jamie Dimon, but at the end of the day, he's talking his book." - Richards, defending private credit growth against banking sector skepticism

• "Private credit markets are growing at 20% year, I believe are close to 10 to 15 trillion in a decade." - Richards, outlining his aggressive growth projections

• "It's not peaked. No, we're nowhere close to everything." - Richards, directly contradicting Dimon's assessment of market maturity

• "Do you think institutions and wealthy, very wealthy individuals should be the only ones that benefit from the private markets?" - Richards, challenging regulatory concerns about retail access

• "To deny individuals the opportunity to make those investments to me is so much regulation wrapped around it that you're actually hurting who you're trying to help." - Richards, on wealth democratization benefits

The Wrap: 

Richards' bullish outlook on private credit reflects broader shifts in financial markets, where traditional banking constraints create opportunities for alternative lenders to serve growing demand from private equity and corporate borrowers. His projections suggest private credit could become as significant as public debt markets, fundamentally reshaping how companies access capital while offering investors superior risk-adjusted returns previously available only to institutions.