PART I: WHAT IS THE IMPACT OF RISING PRIVATE DEBT MARKETS?

The discussion centers on the transformative growth of private credit markets, driven by regulatory changes and the demand for flexible credit solutions from private equity firms. This growth is seen as a fundamental shift in finance, with private credit markets expanding significantly over the past decade. The role of technology, particularly AI and big data, is highlighted as a means to improve underwriting and risk assessment in private debt. However, the application of AI is still in its early stages, with a focus on efficiency and data management. The private credit market is noted for its flexibility and lack of syndication risk, though it lacks liquidity compared to bond markets. The discussion also touches on the potential for private credit to address distressed debt situations, offering new growth opportunities. There is interest in private credit from family offices, particularly in regions like Saudi Arabia, due to the attractive risk-adjusted returns. The conversation concludes with a recognition of the need for regulatory oversight as alternative credit products enter the wealth channel.