June 1 (Reuters) – Private credit funds provided nearly $560 billion in new loans to U.S. businesses over the last three years, helping create more than 6.5 million jobs, according to a Managed Funds Association report seen by Reuters.
The report illustrates the crucial role of alternative asset managers in financing businesses and the broader economy, with the industry rapidly expanding over the past decade as investors increased allocations to private markets.
As traditional lenders retrenched from financing riskier loans in recent years due to stricter regulations, private credit firms stepped in to fill the void.
MFA estimates private credit lending since 2023 generated roughly $897 billion in economic activity across the U.S., with California, Illinois and Texas accounting for the largest shares.
“Alternative asset managers provide a meaningful contribution to the U.S. economy and everyday Americans. Regulators should continue fostering a regulatory framework that encourages these benefits nationwide,” MFA CEO Bryan Corbett said.
Washington, D.C.-based MFA, which represents the global alternative asset management industry, analyzed private credit and hedge fund investment data from BlackRock’s Preqin and federal datasets for the report.
Allocations to hedge funds by pensions, university endowments and non-profit foundations across the U.S. have jumped to roughly $1.6 trillion, as investors look to fund long-term financial commitments.
Institutional investors use hedge funds to diversify portfolios and generate stable long-term returns. Pensions led the way with $940 billion invested in hedge funds, while non-profit foundations have invested $510 billion.
New York, California and Texas are the top states for institutional hedge fund allocations.
Private credit loans to U.S.
businesses by year
2023 $163.6 billion
2024 $157.6 billion
2025 $238.7 billion
Pension, foundation, and
endowment allocations to hedge
funds*
2023 $1.43 trillion
2024 $1.44 trillion
2025 $1.56 trillion
* Growth over time, not annual
investment totals
Source: MFA
(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru and Anirban Sen in New York; Editing by Shilpi Majumdar)
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