Private Credit Outpaces Traditional Asset Managers in Retail Race | Weekly Pulse

Must Know: Private Credit Surges as Traditional Asset Managers Struggle to Keep Pace

• Bottom Line: Private credit firms are rapidly outpacing traditional mutual fund giants in retail product development, with Blackstone raising $3.7 billion for BCRED in a single quarter while T. Rowe Price's retail private credit fund reached only $2.6 billion after nearly two years.

• Why It Matters: Private credit pays 150-200 basis points more than both traded high-yield and investment-grade debt, making it increasingly attractive as corporate bond spreads hit their lowest levels since the late 1990s. Traditional asset managers have splashed out more than $35 billion buying private-markets firms since 2021, but many tie-ups are struggling to deliver expected results.

• Big Picture: Blackstone predicts the private credit market will balloon from about $2 trillion currently to $30 trillion in coming years, driven by lending for infrastructure like data centers, real estate, and power generation.

Trends to Watch

• 🤖 AI Infrastructure Boom - Meta's $29 billion data center deal highlights booming demand for AI infrastructure financing, with JPMorgan estimating $150 billion needed for US data centers in 2026-2027

• 📱 Retail Democratization - Trade Republic's €1 minimum investment model and monthly redemptions represent new approach to making private markets accessible to mass market

• 🔄 Secondary Market Growth - Credit secondaries set to exceed $18 billion this year, up from $11 billion in 2024, driven by investor rebalancing amid rate environment changes

• 🌐 Technology Integration - LSEG's blockchain-powered Digital Markets Infrastructure platform facilitates first private fund transaction, demonstrating appetite for end-to-end regulated financial markets infrastructure

• 📊 Performance Analytics - S&P Global's collaboration with Cambridge Associates and Mercer creates comprehensive private markets data ecosystem launching in beta by year-end 2025

• ⚡ Public Company Targeting - Private credit firms increasingly focusing on large public companies seeking diversified funding mix, with over $800 billion in North America and Europe debt maturing by 2027

• 🏗️ Infrastructure Focus - Federal Reserve rate cuts expected to drive significant deal activity through 2025-2026, with increasing demand for private investment products and underlying investments

• 🏟️ Sports Investment Surge - PE capital invested in sports surpassed $12 billion across 95 deals in 2025, exceeding both 2024 ($9.9B) and 2023 ($9.8B) totals

• 🏠 Manufactured Housing Bet - Brookfield's potential $10+ billion acquisition of Yes! Communities signals rising optimism about affordable housing segment amid expected housing supply shortage

• 🇸🇦 Middle East Data Center Expansion - Saudi Arabia exploring partnerships with Blackstone and BlackRock for significant data center capital commitments through sovereign wealth fund Humain

• 🔄 Strip Sale Innovation - Blackstone considering shifting GP Stakes fund positions into new vehicles as creative method to unlock liquidity from hard-to-exit investments in other private-markets firms

Industry Insights: Strategy & Outlook

• Manufacturing Challenges: Baby Boom owners of manufacturing companies are reaching retirement age, but critical distrust exists between industrial owners and private equity due to concerns over financial engineering and debt-loading practices.

• Retail Access Expansion: Trump's executive order aims to expand 401(k) access to alternative assets, but questions remain about whether private markets have truly outperformed public markets after accounting for fees.

• Bank Partnerships: Apollo President Jim Zelter believes partnerships with banks are key to thriving future in private credit, with Apollo cultivating 12 origination partnerships including BNP Paribas and Standard Chartered.

• Regulatory Evolution: SEC's Investor Advisory Committee approved recommendations for expanding private markets access to ordinary investors, including stronger safeguards and guardrails for less-sophisticated investors.

• Fed Rate Impact: Federal Reserve's quarter-point rate cut to 4-4.25% has ignited optimism among PE deal advisers, with potential for more leveraged buyout activity as sponsors become confident in financing deals with higher debt levels.

• FABN Strategy Growth: Apollo's funding agreement-backed notes outstanding reached $64 billion as of June, nearly double the $34 billion reported a year earlier, using regulatory arbitrage between bank and insurer capital rules.

Deal Spotlight: Transactions & Strategies

• 🏠 SimpliSafe Acquisition - HPS Investment Partners and Blue Owl Capital providing $1.2 billion unitranche loan for GTCR's acquisition from Hellman & Friedman at 5 percentage points over benchmark with seven-year maturity

• 🏢 ISC Secondary Sale - KKR exited Integrated Specialty Coverages through secondary sale to Onex Corp, with Morgan Stanley as lead financial adviser

• 📊 PassiveLogic Funding - UK-based Noa Capital Partners led $74 million funding round for building automation technology company, with participation from PSP Growth and Prologis Ventures

• 🛡️ Altus Commercial Sale - BharCap Partners sold Altus Commercial Receivables division to Astira Capital Partners, retaining Armstrong Insurance Services

• 🏍️ Harley-Davidson Partnership - Company announced sale of nearly 10% stake and over $5 billion of retail loans to KKR & Co. and Pacific Investment Management Co.

• 💰 Creative Planning-SageView - Creative Planning in advanced talks to acquire $238.5 billion retirement plan manager SageView Advisory Group from Aquiline Capital Partners

• ⚡ Hill Top Energy Center - Blackstone acquired 620-megawatt natural gas power plant from Ardian for nearly $1 billion to support data center operations in Pennsylvania-Jersey-Maryland grid

• 🏘️ Yes! Communities Deal - Brookfield Asset Management in talks to acquire US manufactured homes landlord from Singapore's GIC for more than $10 billion

• 🏟️ McLaren Racing - Bahrain's Mumtalakat and Abu Dhabi's CYVN Holdings acquired McLaren Racing for $4.7 billion, largest sports deal in PE history

Fundraising Focus: Capital Formation

New Fund Launches

• 🤝 Lincoln-Bain Partnership - Lincoln Financial and Bain Capital launched Lincoln Bain Capital Total Credit Fund, offering globally varied private credit portfolio including mid-sized private company loans

• 🎪 Robinhood Ventures - Robinhood filed for Robinhood Ventures Fund I, a closed-end fund to give retail investors exposure to private companies before IPO

• 🌍 EQT Nexus Launch - EQT launched European Long-Term Investment Fund providing non-professional investors access to private markets spanning early-stage, growth, and buyouts

Successful Raises

• 📈 Arch Series B - Raised $52 million led by Oak HC/FT to expand institutional growth and real-time reporting capabilities

• 💼 Veritas Capital - Tech investor raised $14.4 billion for oversubscribed Fund IX

• 🏗️ ICG Infrastructure Fund II - Raised €3.15 billion, oversubscribed and more than double predecessor's €1.5 billion size with strong North American investor demand

• 🏟️ CVC Sports Surge - CVC Capital Partners launched $14 billion Global Sport Group, largest sports fund in PE history, while Apollo launched $5 billion sports investment vehicle

Market Spotlight: Regional Developments

🇺🇸 United States

Nexstar Network kicked out all private equity-backed members (about one-third of its 800 member base) to protect independent technicians from PE consolidation in trades industries.

🇬🇧 United Kingdom

$42 billion transatlantic "Tech Prosperity Deal" includes Microsoft's $30 billion cloud investment and Google's £5 billion data center commitment, positioning UK as European tech hub.

🇨🇳 Greater China

VC deal volume reached only 2,320 transactions worth $5.7 billion in H1 2025—the lowest quarterly figure since 2019, with PE activity equally subdued at just 86 deals versus 279 for all of 2024.

🇪🇺 European Union

Trade Republic partnered with Apollo and EQT to offer private markets access starting at €1 minimum investment with monthly redemptions, compared to typical €10,000 minimums and quarterly redemptions.