Private credit and business development companies (BDCs) have come under increased scrutiny in recent weeks as fresh concerns emerge around loan valuations, rising credit risk, and liquidity - particularly in products aimed at wealth investors.
Shares of listed BDCs are trading below the value of their underlying assets, reflecting investor caution. At the centre of recent concerns is Blue Owl Capital, which recently gated withdrawals from retail-focused funds amid a surge in redemption requests, raising further questions about how private credit structures handle redemption pressure.
Despite this, industry participants say the long-term opportunity in the wealth market remains compelling, and there is still strong demand from high net worth investors.
"Recent headlines around large platforms such as Blue Owl have certainly prompted renewed scrutiny across the private credit and BDC space, particularly when it comes to wealth channel distribution," said Samuel Leach, head of investor relations at TAB.
"Historically, many private credit managers focused almost exclusively on institutional capital because it was operationally simpler, whereas the wealth channel introduces a broader base of investors, more regulatory considerations, and a need for greater transparency and communication."
However, he said the opportunity in the wealth market is "simply too large to ignore" and that GPs remain undeterred.
"From our perspective at TAB, where we deploy significant capital into asset-backed lending opportunities, investor demand from sophisticated and high-net-worth individuals remains extremely strong," he said.
"What we are seeing is not a retreat from the wealth channel, but a shift toward better structures, clearer disclosure, and stronger investor protections."
In a higher interest rate environment, he added, demand for private credit remains supported by its income characteristics.
"Meanwhile, asset-backed lending strategies such as real estate bridging and private credit remain highly attractive because they provide predictable income and are secured against tangible assets."
Looking ahead, Leach said the wealth market is continuing to evolve rather than contract.
"I would not characterise the wealth market as ‘too much hassle’ for GPs. Rather, it is evolving rapidly and becoming more sophisticated," he said.
"Private credit remains one of the fastest-growing asset classes globally, and the wealth channel will play a central role in that growth over the coming decade."
