The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

The industry looks set to grow from about US$2 trillion in assets under management today to US$3.4 trillion by 2030. But the real story is not just size. This is a market at a turning point. Some players will scale; others will stall.

A powerful vote of confidence in private credit

PwC surveyed more than 120 credit portfolio managers globally, and the message is clear. Private credit remains resilient, relevant, and in demand, particularly in the UK. More than 80% of managers expect increased allocations over the next 12 months. And 44% expect allocations to rise by more than 20%. 

That is a powerful vote of confidence. Despite pressure on defaults and competition, our survey clearly highlights the enduring attractiveness of private credit as an asset class and its importance to global capital markets. 

Higher interest rates, tighter lending conditions, and demand for yield have attracted vast amounts of capital to private credit funds. That capital has helped spark innovation and growth across a wider range of sectors. 

The new success factors

But this is also a market entering a more demanding phase. Private credit is facing its first real test as a major asset class. That is not a negative thing. It is a sign of maturity. The gap between the best managers and the rest will widen. The winners will be those that can show disciplined underwriting, stronger portfolio management, credible restructuring capability, and the ability to deliver attractive risk-adjusted returns through the cycle.

Private credit funds and banks: clients, competitors, and partners

This matters well beyond private credit funds. For banks, private credit is now embedded across the funding ecosystem and increasingly influencing how risk and capital are distributed across the financial system. Private credit funds are a client, a competitor, and a partner for banks. Private credit funds compete where borrowers want speed, certainty, and flexibility. They partner where banks bring origination, structuring expertise, and long-standing client relationships. They are also increasingly a client of banks as credit funds need financing, risk management, and distribution. That makes the relationship between banks and private credit funds complex, and one that needs to be managed deliberately. 

The opportunity for banks is to balance all three sides of the equation. Banks can build partnerships that combine the origination strengths of banks but use private credit capital to offer more compelling product solutions to their clients. In asset-based finance, which is one of the highest-growth areas for many funds and a key area of innovation, banks are structuring the deal alongside credit funds. 

In the UK, there are examples of banks and private credit funds working together to fund non-bank lenders that need access to capital. Similar opportunities are emerging across infrastructure, real estate, speciality finance, and structured solutions.

Rapid growth raises the stakes. Recent high-profile failures have reinforced the need for stronger governance and better visibility of risk. As we move through the cycle, it is more important than ever to understand structural risk in financings and the depth of diligence being performed. 

Explore your next move in PwC’s Global Private Credit Survey: Private credit’s next phase - growth under pressure.