Private credit faces painful reckoning as cheap capital era ends
By
The Economist
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Summary
The article argues that the private-credit market, shaped by a decade of low interest rates and abundant liquidity, is facing a painful unwinding as those conditions reverse. Hamza Lemssouguer contends that assumptions built on cheap capital, stable growth, and predictable exits are no longer valid, with implications extending beyond credit markets.
Key quotes
· 3 pulledThe current environment was shaped by a decade of very low interest rates and abundant liquidity, which flattered leverage and suppressed risk.
Those conditions are unwinding, with implications that extend well beyond credit markets.
It's time to ditch assumptions built on cheap capital, stable growth and predictable exits.
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