Global Funds Add to Warnings of Risks in Private Credit (2)

From global banks to alternative fund managers, more senior financiers are joining a growing chorus warning of cracks in private credit.

TCW Group Inc.’s Chief Executive Officer Katie Kochtold a forum in Hong Kong on Wednesday that she’s “very nervous” about parts of private credit. Tony Yoseloff, chief investment officer of Davidson Kempner Capital Management LP, said there’s been a “race to the bottom” in terms of covenants.

Their comments come as private credit — or lending done outside the heavily regulated banking sector — has ballooned to a $1.7 trillion industry. Some banks are making conscious ...