Private Credit Offers No Extra Gains After Fees, New Study Finds

A trio of academics has a bold take on the booming $1.7 trillion private credit market: after accounting for additional risks and fees, the asset class delivers virtually no extra return to investors.

In a new study released by the National Bureau of Economic Research, the professors argued that direct lenders on the whole hardly produce any alpha — or extra compensation over broad market benchmarks.

That conclusion is sure to be controversial in a market that has more than doubled in size over the past five years thanks to the allure of higher and steadier returns compared to publicly ...