Private credit, also commonly called private debt, has emerged as a growing component of the global financial landscape. As traditional banking systems and public debt markets face challenges, private credit has stepped in to fill funding gaps, offering unique opportunities for both borrowers and investors. With the private credit market nearing $2 trillion in assets under management (AUM) and projected to grow further, understanding this asset class is essential for modern investors. This article will break down what private credit is, its types, its role in portfolios, and why it’s gaining traction today.