Who is driving demand for private credit?

'Alternative' asset class is now mainstream for pension funds, insurers and others. By Rewin Pataibunlue

- Rewin Pataibunlue

Global demand for private credit continues to accelerate, supported by long-term commitments from pension funds, insurers, sovereign wealth funds and the world’s wealthiest families. This momentum is not a short-term reaction to high interest rates, but a reflection of deeper structural changes in global capital markets.

As interest in private credit in Thailand grows, understanding the true drivers of demand is increasingly important for investors, corporate borrowers and policymakers.

A structural shift became clearer in mid-2024, when major central banks, including the US Federal Reserve and the European Central Bank, began easing monetary policy after two years of aggressive tightening. Many investors questioned whether the appeal of private credit would fade alongside falling benchmark rates. Yet data showed the opposite.

According to the Global Private Debt Report 2025 from the alternative asset market data provider Preqin, private credit assets reached roughly US$2.3 trillion, almost five times their size a decade earlier. This expansion confirms that private credit has moved far beyond its “alternative” status and has become a core component of the global institutional investment landscape.

Among all investor classes, pension funds remain the most dependable and influential force behind the growth of private credit. Research from the Federal Reserve highlights that pensions account for a substantial share of global commitments. Leading institutions such as Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan and CalPERS (California Public Employees' Retirement System) have steadily increased allocations.