Private Credit Vulnerabilities Include Liquidity and Reporting Concerns 

Citing several Bank of International Settlement reports, Bloomberg notes that private credit could experience liquidity mismatches between their longer-term loans and the funding they attract from retail investors as those investors are provided the flexibility to redeem at least a portion of their investments. The report also suggests that the growing role of insurance companies and retail investors in the space, as well as the degree of leverage, warrant closer monitoring. Retail investors are expected to be the fastest growing source of funds for private credit, and the reports find that diversification of private credit investments may be key to avoiding unnecessary risk.

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