UBS Chairman Colm Kelleher warned against growing risks in private credit as the market continues to boom.
“There is clearly an asset bubble going on in private credit,” Kelleher said at the FT Global Banking Summit in London on Tuesday. “There are many other asset bubbles building. What it needs is just one thing to trigger a fiduciary crisis.”
Private credit has become an increasingly sought-after funding tool for buyout firms as banks have pulled back amid a spike in interest rates and a drop in investor risk appetite. Some banks are concerned about this shift as underwriting these types of loans — and then selling them to other investors — is a strong source of revenue for them.
Kelleher is the latest top executive to warn about the rising risks. Pimco executives said earlier this month the market is under-regulated and lacks transparency.
Myriam Balezou & Laura Benitez | Yahoo Finance