Everyone Rushes to Private Credit Just as Risks Start to Grow (2)

First came the debt specialists and the private equity firms. Then, hedge funds and wealth managers saw an opening. Now everyone from sovereign wealth funds to venture capitalists are spouting Wall Street’s favorite buzzword: private credit.

Higher rates, banks’ lending retreat and strong fees are bringing a raft of newcomers to the product that has quickly turned from a niche to a must-have. Amid the proclamations of an industry poised for a multi-trillion-dollar boom, a few voices are warning that it may all get ugly very soon.

DWS Group, Fidelity International, PGIM and T Rowe Price are among the ...