Credit rating agency Moody’s Investor Service, has issued a warning to investors that the debt poses ‘systematic risk’. The factors that Moody’s sees sourcing that risk is an opaque market, eroding lending standards and liquidity concerns. Private credit has seen a flood of inflows this year to venture capital, private equity, real estate and infrastructure as the industry is more robust to the pressures from the mainstream economy on traditional bonds and equity. However, the risks in the medium sized boutique bond market are hard to capture because they fall in regulatory limbo and could cause broader economic disruption. Finally private equity relies heavily on leverage and while that's fine for the time being, it may pose serious structural issues for the illiquid market as interest rates begin to normalize.

FINSUM: The 2008 financial crisis was primarily driven by the rise of the lesser regulated shadow banking industry. Private credit’s swell is very reminiscent of the housing bubble creation.