Private credit and alternative investments see growing market interest

Private credit has emerged as a significant alternative investment strategy, involving non-bank lending to companies to provide capital growth and income outside traditional banking systems. This growth is driven by tighter banking regulations and investor demand for yield diversification as traditional banks reduce lending in certain sectors.

While major asset managers are launching products to increase access to private markets and Washington has encouraged their inclusion in 401(k) plans, financial advisors face challenges. Research from Morningstar indicates that advisor confidence in explaining private investments has declined from 68% in 2025 to 61%. Additionally, 46% of advisors expressed concerns regarding fees and fee transparency.

To simplify access, firms like Morgan Stanley have introduced model portfolios that include small allocations to private equity, private credit, real estate, and infrastructure. Other major players, including Apollo, Franklin Templeton, and JPMorgan, are also featured in upcoming alternative investment suites.