Buyout Firms Stuck With Old Assets Tap Private Credit for Help

Buyout firms struggling to offload companies they’ve held for several years and return cash to investors are finding allies in the $1.7 trillion private credit market.

Direct lenders including Blackstone Inc., Goldman Sachs Group Inc.’s asset management division and Neuberger Berman Group have stepped up to provide fresh cash to those buyout shops by making preferred equity investments in some of the companies they own.

The strategy allows the private equity firms to send some money back to investors at a time when the industry has returned the lowest amount of cashsince the financial crisis. Asset sales ...