Measuring Counterparty Exposures to Private Credit

Private credit has expanded significantly over the past decade, forging important interconnections with traditional financial institutions. Counterparty exposures generally originate through two primary channels: (1) entities that extend debt financing to private credit funds and (2) private fund limited partners that provide equity capital and commit to future capital contributions. This brief outlines methodologies for identifying private credit funds and offers estimates of the magnitude of counterparty exposures. Based on observed data, we estimate the size of the two exposure channels to range from $410 to $540 billion for those entities that extend debt financing and $300 billion for the capital commitments of limited partners.