Private credit funds have funneled nearly $560 billion into U.S. businesses since 2023, according to new industry figures, a wave of nonbank lending that trade group MFA says has supported jobs and juiced economic activity. The boom is arriving just as some large private credit vehicles face rising redemption requests, drawing closer scrutiny from regulators and forcing investors, pension trustees and borrowers to decide whether this is a sturdy new capital channel or a pocket of risk that needs tighter oversight.
In a new dataset, the Managed Funds Association says private credit funds, using Preqin and federal data, have made almost $560 billion in new loans to U.S. firms since 2023 and that those loans helped generate roughly $897 billion in economic activity while supporting about 6.5 million jobs, according to MFA. The group also notes that pensions, foundations and endowments have placed more than $1.5 trillion into hedge funds and alternative vehicles that back private lending, per MFA. “Private credit and hedge funds strengthen America’s public and private capital markets and drive economic growth,” MFA President Bryan Corbett said in the release.
Regulators Step In
The rapid buildout has caught the eye of policymakers. The Federal Reserve’s May 2026 Financial Stability Report found that private credit loans accounted for about $1.4 trillion of corporate debt as of late 2025 and documented higher redemption requests at semi liquid private credit vehicles. On May 6 the Financial Stability Board released a report warning that valuation opacity, concentrated exposures and links with banks and insurers could amplify stress unless data and monitoring improve, and it urged comparable metrics and better reporting so supervisors can track risks more consistently.
Where It Touches Local Investors
Public pension boards and local investors are already feeling the shift. San Francisco’s retirement system signed off on roughly $110 million in new commitments, expanding its private credit footprint, according to drops $110 million on Asia loans, Bay Area startups. At the same time, reporting in the financial press shows many large North American pensions have largely maintained or even boosted private credit allocations, treating the asset class as a long term source of yield rather than a quick trade, a stance that helps explain why banks, managers and trustees remain committed even as the spotlight grows harsher.
What Comes Next
Policymakers and supervisors are now mapping out next steps. The FSB laid out a package of data and monitoring recommendations that would track market size, links with banks and insurers, leverage, liquidity features and borrower credit quality, while the Fed emphasized that although near term systemic risk to banks appears limited, continued redemptions and funding strains could still reduce credit for some borrowers. Industry groups, for their part, are pushing for a regulatory framework that preserves private markets while improving transparency, and whether regulators choose more prescriptive rules or focus on expanded reporting will shape how quickly managers and trustees adjust.
Bottom line, the MFA figures show private credit is already a central funding source for many companies, and the coming months will reveal whether sharper disclosures and stronger supervisory tools are enough to steady the market or whether uneven loan performance and liquidity pressures force a tougher reset for managers and investors alike.
