Morgan Stanley to double private credit portfolio
Morgan Stanley’s asset management business aims to double its private credit portfolio to more than $50bn (£39.37bn within the medium term.
According to reports from Reuters, the firm is in the process of gathering funds from large investors as institutions eye up the growth prospects of the sector.
David Miller, Morgan Stanley’s global head of private credit and equity, said that institutional investors such as sovereign wealth funds and insurance companies account for approximately two thirds of the firm’s current private credit portfolio, while wealthy individuals account for the rest.
Read more: JPMorgan raising $3bn to grow its private credit strategy
“The vast majority of new capital will continue to come over the next decade from our institutional clients,” Miller said.
Morgan Stanley’s private credit business is worth approximately $25bn at present, with the bank itself investing approximately $300m into the business.
However, it plans to double this to $50bn within the next few years.
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Preqin and Pitchbook have estimated that the private credit market is worth between $1.5trn and $1.75trn, but Morgan Stanley’s Miller believes that the market may already be worth more than $2trn.
Private credit activity has surged in recent years, and the market is predicted to grow even larger, as banks reduce their corporate lending and private firms step in to fill the lending gap.
Earlier this year it was revealed that JPMorgan is raising between $2.5bn and $3bn to grow its private credit strategy.
Meanwhile, Blackrock has predicted European investors will shift up to 20 per cent of their portfolio towards private credit in the coming years.
Read more: BlackRock exec forecasts “significant shift” towards private markets