Private credit vehicles have become a major source of financing for American companies, providing almost $560 billion in new loans to U.S. businesses between 2023 and 2025, according to a Managed Funds Association (MFA) report reviewed by the association.
The MFA analysis attributes the expanded private credit supply to the broader growth of alternative asset management over the last decade, as investors shifted larger sums into private markets. That shift has coincided with a pullback by some traditional lenders from higher-risk loans amid tighter regulatory constraints, a dynamic the report says created room for private credit firms to increase lending activity.
The report links this lending to notable economic effects: MFA estimates those loans produced about $897 billion in economic output across the United States and supported more than 6.5 million jobs. The states receiving the largest shares of this activity are California, Illinois and Texas.
"Alternative asset managers provide a meaningful contribution to the U.S. economy and everyday Americans. Regulators should continue fostering a regulatory framework that encourages these benefits nationwide," MFA CEO Bryan Corbett said.
Washington, D.C.-based MFA compiled the figures for its report by analyzing private credit and hedge fund investment data from BlackRock’s Preqin and federal datasets.
The report also highlights growing institutional commitments to hedge funds by pensions, university endowments and non-profit foundations. Overall allocations to hedge funds have risen to about $1.6 trillion, driven largely by pension plans, which hold roughly $940 billion, and non-profit foundations, which hold about $510 billion. New York, California and Texas are identified as the leading states for institutional hedge fund allocations.
The MFA report breaks down private credit lending and hedge fund allocation figures year by year as follows:
| 2023 | 2024 | 2025 | |
|---|---|---|---|
| Private credit loans to U.S. businesses | $163.6 billion | $157.6 billion | $238.7 billion |
| Pension, foundation, and endowment allocations to hedge funds* | $1.43 trillion | $1.44 trillion | $1.56 trillion |
| *These figures reflect growth over time, not annual investment totals. Source: MFA | |||
The MFA findings underline the expanded role alternative asset managers now play in financing segments of the economy that traditional banks have reduced exposure to in recent years. By stepping in where bank lending has contracted, private credit funds have become a consequential channel of capital for businesses and institutions across multiple states.
Summary
Between 2023 and 2025, private credit funds issued nearly $560 billion in new loans to U.S. businesses, generating an estimated $897 billion in economic activity and supporting more than 6.5 million jobs. Institutional allocations to hedge funds have also increased, reaching about $1.6 trillion, with pensions and non-profit foundations accounting for major shares.
Key points
- Private credit provided roughly $560 billion in new loans to U.S. companies over three years (2023-2025), with the largest lending years concentrated in 2023 and 2025.
- The MFA estimates these loans helped create more than 6.5 million jobs and generated around $897 billion in economic activity, with California, Illinois and Texas receiving the largest shares.
- Institutional allocations to hedge funds increased to approximately $1.6 trillion, led by pension funds ($940 billion) and non-profit foundations ($510 billion); New York, California and Texas are the top states for these allocations.
Risks and uncertainties
- Regulatory shifts affecting traditional banks could change the relative role of private credit if banks resume lending to higher-risk borrowers - this affects the lending and financial sectors.
- Concentration of lending and hedge fund allocations in a few states could expose regional economies to localized shocks tied to alternative asset activity - sectors tied to regional employment and investment flows are most affected.
- The report’s figures rely on datasets from private and federal sources; variations in data collection or classification could affect the reported totals - this impacts analysts and institutional investors who use these figures for allocation decisions.
Notes: Data and estimates in this report are drawn from the MFA’s analysis of Preqin and federal datasets, as stated by MFA. The hedge fund allocation figures reflect cumulative growth over time rather than annual investment totals.