Private Credit Growth

The Private Credit Growth and the Shrinking Universe of Public Companies

Over the past two decades, the global financial landscape has undergone a quiet but profound transformation. The dominance of public markets (once the primary arena for corporate financing and growth) is eroding. In its place, private capital, and especially private credit, has surged, reshaping how companies are financed, valued, and governed. The graphic you see (highlighting mega-firms such as Apollo Global Management, Blackstone Inc., Ares Management, among others) is a powerful illustration of this paradigm shift (noticeable private credit growth).

In this article,  we deconstruct these trends, analyze the numbers, and reflect on what this means for the future of corporate finance (and private credit growth).

From Thousands to Thousands, the Collapse in Public Listings
In 1996, the U.S. boasted approximately 8,000 publicly listed companies. By contrast, today that number has fallen to roughly 4,000 (roughly 50% decrease). 
This contraction in public listings is not because the economy shrank (quite the opposite). Instead, it reflects a deliberate structural shift: companies today are opting to stay private longer, or avoiding public listings altogether. 
Supporting this trend is the increasing median age at which companies go public: firms now tend to list when they are much larger, bypassing years (or even decades) of their growth while privately owned. 
The implication: the public markets (once the default destination for scale-up firms) are no longer the near-universal path. Instead, private markets have emerged as the default ecosystem for growth, financing, and exit.

 
Private Credit Growth: From Niche to Mainstream (Explosive Growth in AUM)
The rise of private credit over the last decade is nothing short of breathtaking. Once a niche corner of alternative finance, private credit has scaled into a major pillar of global capital markets.

Global assets under management (AUM) in private credit reached ≈ $2.1 trillion in 2023, up from a fraction of that just a decade earlier, according to Reserve Bank of Australia. It also estimates that private credit assets globally (encompassing both deployed and committed (but uninvested) capital) now stand at about $2.1T to $2.3T. 
For reference, that growth represents a roughly 7-fold increase over the past decade in certain jurisdictions. This growth has not been evenly distributed. Rather, a handful of large, diversified alternative asset managers now dominate. 

Why Private Credit: The Structural Drivers
What explains this astounding shift from public to private, and from bank/ bond financing to private credit? Several interrelated structural forces:

1) Regulatory and Macro Pressure on Banks
Since the Global Financial Crisis, banks have faced stricter regulation, higher capital requirements, and tighter constraints on risk-taking. As a result, especially for leveraged or growth-stage companies, traditional bank financing has become harder to access or less attractive. Private credit funds (with fewer regulatory constraints) stepped in to fill that gap. 

2) Illiquidity Premium & Attractive Risk-Return Profile
Private credit often offers higher yields than traditional bond or loan markets, compensating investors for the illiquidity and complexity of underwriting bespoke loans. For borrowers (many of them PE-sponsored firms) this means bespoke terms, discretion, and flexibility.

3) Demand for Alternative Capital from Private Firms
As companies delay going public (staying private for longer) their financing needs over growth, acquisitions, capital expenditures, or leveraged buyouts increasingly rely on non-public financing sources. Private credit fills that void. 

4) Institutional Investor Appetite for Private Markets
Pension funds, insurance companies, endowments, and sovereign wealth funds (traditional allocators to public equities and bonds) are increasingly allocating capital to private credit for diversification, yield, and income. 
The cumulative effect: private credit has morphed from a supplementary financing channel into a foundational pillar of global corporate finance.

 
Consequences: A Transfer of Value, Control, and Risk

Value Creation Privatised
The decline in public listings and the rise of private capital means that a growing share of corporate value creation now occurs outside public markets. According to a recent estimate by Blackstone, private markets (combining private equity, private credit, real assets and other alternative asset classes) may reach US$18 trillion – US$22 trillion by the mid-2020s.

For many companies, “going public” is no longer a necessary step to achieve scale and success; instead, private capital provides both growth capital and exit liquidity (through acquisitions, recapitalizations, or private equity exits).

Concentration of Power Among Few Capital Providers
Given that a handful of firms now control the majority of private credit AUM, those firms have outsized influence over which companies get financed, under what terms, and at what valuations. This concentration may lead to a new kind of market power (less visible than public-equity dominance, but potentially more pervasive).

Risks: Illiquidity, Opacity, and Cycles
While private credit offers attractive yields and flexible terms, it comes with drawbacks:

- Illiquidity: investors (LPs) often commit capital for long durations, with limited resale options.
- Opacity:  unlike public bonds and loans, private credit transactions are rarely public, making transparency limited.
- Risk of defaults:  many borrowers in private credit are leveraged, mid-sized firms that may be sensitive to economic downturns, interest-rate swings, or refinancing risk.

Moreover, as the scale of private credit grows, its systemic importance does too, raising concerns about financial stability, especially if macro conditions deteriorate.

To sum it all up, the decline in publicly listed companies (roughly 50% percent reduction over the past decades) combined with the explosive growth in private credit AUM to multi-trillion-dollar scales, signals a tectonic shift in global finance. Firms like Apollo, Blackstone, and Ares are not just alternative asset managers, they are becoming central financing engines for a large swath of the economy.