The Credit Shift:
who the rate rise paid

Why this belongs in an archive about Epstein. It does not, strictly. It belongs here because the Apollo file raised the question and answering it honestly required going somewhere the Epstein files do not reach.

Recording that boundary explicitly is the point. The alternative — leaving the growth unexplained on a page about a man who paid Epstein $158 million — invites readers to supply a connection that the evidence does not support.

The honest explanation is structural, and it is bigger.

Private credit was already growing before the pandemic. Global AUM went from about $300 billion in 2010 to roughly $1.6–$1.7 trillion by 2023, with a compound growth rate near 20% from 2017 to 2022. The number of private debt funds rose from 100 in 2011 to 1,080 in 2023.

What the pandemic did was accelerate it violently, by making bank credit scarce and expensive at exactly the moment borrowers needed to refinance.

And the asset class is now larger than the markets it displaced. Per Federal Reserve data, private credit exceeds both the high-yield bond market and the leveraged loan market.

The clearest evidence that this was a structural shift rather than any firm’s cleverness is that the largest managers all made the same move, within two years of each other.

January 2022 — Apollo completes its acquisition of Athene.
September 2023 — Blackstone creates Blackstone Credit & Insurance, merging corporate credit, asset-based finance and insurance into one unit.
November 2023 — KKR completes its acquisition of Global Atlantic.

The logic each of them followed is the same one described in Apollo’s filings: the long-dated nature of insurance and retirement liabilities aligns with the long lock-up periods that private debt requires. Annuity money cannot be withdrawn on demand. Neither can a direct loan be sold quickly. The two fit.

What that means in plain terms. Retirement savings became the funding source for corporate lending. The float that backs someone’s annuity is deployed into loans to leveraged companies, and the manager keeps the difference.

The concentration is the striking part. In 2023 the ten largest private credit funds took 51% of all capital raised globally, up from 35% the year before. The top fifty took 91%.

Which is the actual answer to the Apollo question. Apollo grew because it was early to a trade that every peer subsequently copied, and because the capital it had bought — insurance float — was exactly the capital that became most valuable when rates rose.

No individual adviser features anywhere in this explanation, and the whole sequence postdates Epstein’s death.

The household consequence of the same decision.

The Federal Reserve raised rates further and faster in 2022–2023 than in any comparable modern period. Mortgage rates roughly doubled. For a buyer, the monthly cost of the identical house rose sharply without the price falling to compensate.

The lock-in effect compounded it. Existing owners holding mortgages written at pandemic-era rates could not move without refinancing into a far more expensive loan. Supply of existing homes contracted, which supported prices even as demand weakened.

So affordability deteriorated from both directions at once — the cost of borrowing rose while the supply that would normally have softened prices was frozen in place.

The symmetry worth stating precisely. The mechanism that made a mortgage unaffordable to a household is the identical mechanism that made a floating-rate corporate loan lucrative to a fund. Rates went up. The borrower paid more. Somebody received it.

What this page does not claim. That the rate rises were undertaken for anyone’s benefit, that any firm engineered them, or that the housing crisis was designed. Inflation was real and the policy response was conventional. The distributional consequence is the documented part, and it is enough.

The question it leaves open is a policy one rather than a criminal one: whether an economy in which retirement float funds leveraged corporate debt, while households are priced out of ownership, is a stable arrangement. That question is now being asked by financial regulators rather than by critics.

The stress indicators are visible in the public record, and they matter more than the growth figures.

Payment-in-kind loans are rising toward levels last seen before the financial crisis. A PIK loan lets a borrower defer cash interest and add it to principal instead. Rising PIK volume means borrowers cannot pay cash today — Moody’s has warned specifically about its spread among leveraged-buyout borrowers.

Insolvencies followed the rate rise. US Chapter 11 filings ran 39% above the prior year and 46% above the decade average; Canadian insolvencies reached rates not seen in over twenty years.

The opacity is structural, not incidental. Private credit loans are privately negotiated and typically held to maturity. There is no daily mark, no public disclosure of covenant terms, and no timely indicator of underlying asset quality. Regulators are working on disclosure and governance expectations precisely because supervisors cannot currently see where the leverage sits.

And the banks did not fully leave. The IMF estimated US banks extended around $200 billion of credit to private credit funds in 2021, and the figure has likely grown. Risk that appeared to move off bank balance sheets partly moved to lending against the funds that took it.

The rotation has begun to reverse. Bank share of large buyout financings recovered to just over 50% in 2025 from the 2023 low of 39%, and private credit lending contracted in early 2026 while bank commercial lending reaccelerated.

Which is the honest close. This was a cycle, and cycles turn. The open question is what the loans written at the top look like when they mature.