Private Credit Firms Build Cash Hoards to Gain Share of Consumer Debt Market

Private credit firms are raising billions of dollars to grab a share of the $5.2 trillion market that includes US consumer debt, seizing on a growth opportunity while the industry’s traditional lenders are in disarray.

Direct lenders such as Ares Management, BC Partners, KKR & Co., and Medalist Partners in recent months raised the money for funds designed to lend to consumer financing companies. Providers of auto and consumer loans have been unable or unwilling to tap their usual funding sources, namely regional banks and securities sales backed by assets like loan portfolios.