Private credit now ‘mainstream’ in sovereign wealth funds
Private credit has moved from the niche to the mainstream for many sovereign investors, according to new research by Invesco.
Invesco’s Global Sovereign Asset Management study for 2025 found 50 per cent of sovereign wealth funds (SWFs) are planning to increase their allocations to private credit this year.
Read more: Private credit ‘compelling alternative’ to traditional fixed income in US
North American SWFs are leading the way, with two-thirds (68 per cent) expecting to increase allocations. Just one per cent of global respondents said they plan to decrease allocations to the asset class.
Almost half (44 per cent) said they are now participating in the market via direct lending or co-investments, compared to just 30 per cent in 2024, as they look to capture a greater share of returns.
Read more: Private credit is ‘a bigger deal in Europe than in the US’
“Sovereign institutions are fundamentally reassessing how they think about risk, return and resilience as geopolitical fragmentation, stabilised interest rates, changing asset correlations, and evolving inflation dynamics are now being viewed as lasting elements of the investment landscape rather than temporary challenges,” said Rod Ringrow, head of official institutions at Invesco.
“This is not just a tactical shift in allocations, but is part of a wider organisational transformation. Private credit is becoming firmly embedded as a core tool to deliver differentiated returns in an environment defined by volatility and policy uncertainty.”
Read more: Private credit ‘best suited to semi-liquid structure’
