Private Credit

ABF Global Search

Bill Ebinger

Founder and Managing Partner, ABF Global Search. 30+ years of executive search experience in alternative credit, structured products, and asset-based finance. Read full bio.

Private credit is one of the fastest-growing parts of institutional finance. In the United States it has grown from roughly 16% of the leveraged-finance market in 2010 to about 37% in 2024, within a total market of roughly $4.5 trillion (PitchBook, via Lord Abbett, 2025). Measured another way, private corporate credit now makes up more than a quarter of the U.S. sub-investment-grade credit market — up from 8% in the mid-2000s — as that market roughly quadrupled from $0.9 trillion in 2005 to $4.0 trillion in 2025 (Blackstone, 2025). We have run private credit executive search assignments for more than three decades, and the business we hire into today is far larger, more diversified, and more competitive for talent than it was even a decade ago.

This guide covers what private credit is, how the strategies differ, how it compares to public credit, and what the market’s growth means for hiring.

What Is Private Credit?

Private credit is privately negotiated lending between a borrower and a non-bank lender — loans that are not bought or sold on a public exchange (Lord Abbett, 2025). A manager originates the loan, underwrites it directly, negotiates the terms deal by deal, and typically holds it rather than trading it.

The market expanded as banks pulled back from middle-market lending after the 2008 financial crisis, when Dodd-Frank and Basel III capital rules made certain loans expensive to hold. Non-bank lenders filled the gap. While the term once referred mainly to direct lending, it now spans corporate direct lending, asset-based finance, infrastructure debt, select segments of structured finance, and private real estate debt (Lord Abbett, 2025).

What Are the Major Private Credit Strategies?

Direct lending remains the foundation, but the asset class is a family of strategies:

Direct lending — first-lien senior secured loans to middle-market companies, often private-equity-sponsored. The largest segment of private credit (Blackstone; Lord Abbett, 2025).
Asset-based finance — lending secured by specific asset pools rather than corporate cash flow; increasingly built as a complement to direct lending.
Mezzanine and subordinated debt — structurally subordinated capital between senior debt and equity, carrying a higher coupon and often equity participation.
Distressed and opportunistic credit — investing into stressed or restructuring situations; a workout-driven skill set that does not cross over easily from direct lending.
Business Development Companies (BDCs) — regulated investment companies under the Investment Company Act of 1940 that file with the SEC and report quarterly; a major vehicle for direct lending in public and non-traded form.
Infrastructure debt and private real estate debt — adjacent strategies now counted within the broader private credit universe (Lord Abbett, 2025).

The Direct Lending Core

Because direct lending anchors the market, it is where most hiring concentrates. It splits into three segments by borrower size (Lord Abbett, 2025):

Lower middle market — roughly $10–25M EBITDA; the strictest covenants, higher spreads, more execution risk.
Core middle market — roughly $25–100M EBITDA; often the best balance of return, risk, and deal quality.
Upper middle market / large cap — $100M+ EBITDA; the most competitive, with tighter pricing and lighter protections.

The economics are attractive on a risk-adjusted basis. Middle-market direct lending has recently yielded in the 9.7%–10.4% range (Principal Alternative Credit, September 2025), a premium of roughly 200–400 basis points over broadly syndicated loans depending on segment (Blackstone/J.P. Morgan, 2025; Lord Abbett, 2025). Discipline shows in the structure: average loan-to-value sits near 40%, down from about 65% pre-GFC and 90% in the late 1990s (Blackstone; Principal, 2025), and middle-market leverage has fallen roughly half a turn of EBITDA in recent years (Principal, 2025).

Credit quality has held up. The middle-market direct lending non-accrual (default) rate was 1.35% as of September 2025 — below the long-term average of 2.1% and well under the roughly 4% default rate in public high yield and broadly syndicated loans (Cliffwater Direct Lending Index, via Principal, 2025).

How Does Private Credit Compare to Public Credit?

Against high-yield bonds and broadly syndicated loans, private credit trades liquidity for several advantages (Lord Abbett, 2025): higher spreads (the illiquidity premium), stronger lender protections (covenants, collateral, reporting), floating-rate coupons that cushion rising rates, lower mark-to-market volatility, and genuine diversification. The structural difference matters most in a downturn — a direct lender “underwrites to own” the loan, spending 45 days or more in diligence with full access to management, whereas a syndicating bank “underwrites to sell” on a far shorter timeline (Principal, 2025).

What Private Credit Executive Search Reveals About Hiring

The market’s expansion has reshaped where senior credit talent goes and what it earns. Demand for capital is structurally supported: private equity holds more than $2 trillion in dry powder against roughly $485 billion of private-debt dry powder (Preqin, December 2025), a pipeline that has to be financed. As a private credit executive search firm, the patterns we watch most closely are consistent:

More platforms means more seats — for originators, underwriters, portfolio managers, and increasingly workout specialists.
Insurance companies are building internal credit teams, competing with the managers they once funded.
The scarcest profiles combine asset-level or sponsor-side judgment with the ability to stand up a strategy from zero.

In three decades of private credit recruiting, the pattern holds: when an asset class scales this fast, the premium sits on senior judgment that cannot be trained quickly — origination range, underwriting discipline, and workout fluency.

Common Questions About Private Credit

What types of firms hire private credit professionals?

Alternative asset managers, BDCs (public and non-traded), insurance companies building internal teams, pension and sovereign allocators, banks with private credit desks, family offices, and PE-backed credit platforms. Each hires on a different cadence, which is why a private credit recruiter has to understand the vehicle, not just the asset class.

What skills are most valuable in private credit?

The technical foundation — credit analysis, covenant structuring, portfolio construction — is table stakes. What separates senior professionals is sponsor relationships, a real deal-sourcing track record, and the ability to carry a stressed borrower to resolution.

How does private credit compensation compare?

Senior private credit roles are competitive with — and often above — equivalent leveraged-finance and banking seats, with the widest outcomes at scaled platforms that offer equity or carry. Platform quality drives pay more than title.