Fabio Natalucci on the Rise and Risks of Private Credit

Private credit has outgrown its original niche of lending to middle-market firms using funds from institutional investors with long time horizons. Rising participation from retail investors and banks has increased the sector’s interconnectedness with the wider financial system, making investors worried that a wave of redemption requests could lead to a cascade of tighter financial conditions and slower economic growth. In this episode, we talk with Fabio Natalucci, Managing Director at the Andersen Institute for Finance and Economics, about the conditions that caused the rise of private credit, what’s behind its recent distress, and the sector’s biggest vulnerabilities.