Private Credit Reaches $2.5 Trillion, But Market Shows Signs of Fragility
The private credit market has grown significantly, reaching over $2.5 trillion today. In just ten years, this market has more than doubled, attracting institutional investors, funds, and insurers seeking high returns.
Investment in Technology
A large portion of the funds have been invested in the technology sector, particularly in SaaS companies. According to a macroeconomic report by CitriniResearch in June 2028, which details the evolution and consequences of the global intelligence crisis, these companies were valued based on a simple assumption: rapid and sustainable revenue growth. However, this assumption is no longer valid.
Market Turnaround
The same report notes that since 2026, the software market has experienced a sharp turnaround. Listed companies have seen their valuations plummet. Some are now trading between 5 and 8 times their EBITDA. Meanwhile, companies held by private equity funds remain valued based on old multiples, often linked to revenue. A significant gap has appeared between the market's true value and the value recorded in balance sheets. Adjustments are gradual, with valuations dropping from 100 to 92, then to 85. However, public markets sometimes suggest levels close to 50.
Structural Fragility
This discrepancy reveals a structural fragility. The report highlights that private credit, long perceived as stable, is beginning to show its limitations. The private credit market's rapid growth and high valuations have created a fragile environment, making it vulnerable to market fluctuations and corrections. As the market continues to evolve, it is essential to monitor these developments and assess the potential risks and opportunities in the private credit sector.
