Private Debt Push Into Retail Proves Costly as Margins Tighten

Private credit’s push to raise funds from retail clients is starting to put pressure on their profits.

Firms including Blackstone Inc. and Apollo Global Management have been expanding offerings to retail investors, in part, to offset a slowdown in funding from institutional investors. But retail clients demand a greater degree of liquidity and generally want their investments to be put to work immediately. In the rush to satisfy these demands amid competition from peers, funds are having to shrink margins.

“All these large retail inflows into private credit are making some managers more competitive,” said Roxana Mirica, head of ...