Archive · 5 Dec 2025
Private Credit Funds Offer Stability in Market Uncertainty
Private credit funds are becoming popular among investors who want stable returns without being affected by market ups and downs.
These funds, especially in India, are linked to the real economy and offer loans to companies when banks can't or won't.
They grew a lot after the 2008 global crisis and India's banking problems in the mid-2010s.
Private credit funds are less risky because they offer loans that are secured and have the first priority in case of defaults.
They also help companies during tough times by providing tailored lending solutions.
As India's economy grows, these funds are a good way for investors to be part of that growth while managing market volatility.
Private credit AIFs have grown from a niche concept to a substantial sector, with global AUM over US$2 trillion by 2023.
In India, private credit AUM increased from US$8.4 billion in 2018 to US$20.6 billion in 2023 due to banking sector issues.
Private credit funds offer senior secured debt, ensuring high repayment probability and lower risk.
They provide tailored lending solutions to small and mid-sized corporates during economic downturns.
Investors are shifting towards private credit AIFs to participate in India's economic growth while managing market volatility.
- Who
- Investors, private credit managers, borrowers, and portfolio companies
- What
- Shift towards private credit AIFs for stable returns
- When
- Over the past two decades, with significant growth in the last decade
- Where
- Globally and in India, with a focus on the real economy
- Why
- To navigate market uncertainty and achieve risk-adjusted returns
- Global Private Credit AUM
- Over US$2 trillion by 2023
- India Private Credit AUM
- US$20.6 billion in 2023
- Private Credit Growth Trigger
- Banking sector's bad loans and NBFC default crisis
- Private Credit Advantage
- Senior secured debt with high repayment probability
- Investment Shift
- From conventional banking to structured credit