Private Credit's Hidden Dangers: A Cautionary Look at Unregulated Lending
Edward Zitron’s Premium piece warns that private credit has become a vast, mostly unregulated market fueling trillions in loans via asset managers and PE firms. Illiquidity, opaque valuation, and inflated software bets have created systemic risk tied to pension and insurance funds, with recent fund troubles (and redemption freezes) exposing how deeply embedded these loans are in the financial system. The author lambastes asset managers for conflicts and misleading labeling, argues that the sector’s reliance on debt-funded growth is unsustainable, and suggests a looming series of smaller crises rather than a single catastrophe as a real threat.