Private Credit Flows Falter Amid Defaults, AI Disruption Fears

Private credit fund inflows in the first two months of this year dropped by more than a third as investors grew concerned about high-profile leveraged loan defaults and software disruption, according to Morningstar Direct.

Open-ended private credit funds, which allow investors to cash out at periodic intervals and accept money on an ongoing basis, had around $1.1 billion inflows, which compares to $1.8 billion over the same period in 2025, Morningstar global data showed. Although there was a small uptick in February, the sector still attracted the lowest amount on a monthly basis since August 2024.

The $1.8 trillion ...