Private Credit Market Set for $30T Expansion, Reshaping Financial Landscape, McKinsey Analysis

What's New: According to McKinsey's latest private credit analysis, the addressable market for private credit could exceed $30 trillion in the U.S. alone, with $5-6 trillion in assets expected to shift from banks to nonbank lenders over the next decade.

Why It Matters: This seismic shift represents a generational opportunity for asset managers, insurance companies, and banks to redefine their roles in lending, potentially decoupling asset origination from traditional banking structures while creating new partnership models.

Big Picture Drivers:

• Regulation drives banks to reduce exposure in key lending areas, including high-risk commercial real estate and jumbo mortgages

• Scale emerges as critical differentiator, with only largest lenders able to compete for multibillion-dollar financings

• Technology adoption accelerates in underwriting, portfolio monitoring, and digital lending platforms

• Partnerships form between banks, asset managers, and insurers to create new distribution models

By The Numbers:

• Private credit market reached $2 trillion by end of 2023

• 10x growth since 2009

• $5-6 trillion potential shift to nonbank lenders in next decade

• $30+ trillion total addressable market in U.S.

Key Trends to Watch:

• Asset Expansion: Private credit moves beyond direct lending into asset-backed finance, infrastructure, jumbo mortgages, and commercial real estate.

• Business Models: Open-architecture platforms emerge as banks transition to origination and distribution rather than holding assets.

• Insurance Evolution: Carriers build direct origination capabilities and partner with banks for asset acquisition.

• Tech Integration: AI and machine learning reshape underwriting decisions and portfolio monitoring capabilities.

The Wrap: The private credit ecosystem stands at a transformative inflection point, requiring market participants to strategically position themselves across the value chain while building new capabilities in technology, risk management, and partnership development.