Pimco Sounds Alarm on Under-Regulated Private Credit Markets
- Lack of transparency and oversight seen posing investor risks
- Risk is transferred from regulated banks to pensions, insurers
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Risks are building inside the $1.6 trillion private credit market and regulators aren’t doing enough, according to two Pimco executives.
Private credit — which has fast become a Wall Street favorite and is attracting cash from hedge funds, sovereign wealth funds, insurers and pension providers as well as private equity firms — poses a risk to investors because it’s under-regulated and lacks transparency, according to Jamie Weinstein, who helps lead Pimco’s $170 billion alternative-investment business and Christian Stracke, Pimco’s president and the global head of the credit research group.