Private Credit’s $20T Opportunity Hamstrung by Legacy Systems

Private credit markets have ballooned to $6.1 trillion, with Apollo Global Management identifying a $20 trillion addressable opportunity. Yet the sector remains mired in operational inefficiencies, relying on manual processes that inflate financing costs by up to 30%.

Asset-backed finance faces unique challenges. Unlike corporate credit, ABF depends on contractual cash flows from underlying assets—BNPL loans, receivables, or small business financing. Major players like Apollo and Blackstone create custom facilities for originators, but capital often sits idle between weekly drawdowns. This cash drag erodes returns while originators burn expensive equity to bridge gaps.

The industry's reliance on spreadsheet tracking and bloated middle-office operations creates friction reminiscent of paper-based payroll systems. With thousands of monthly loan requests processed through antiquated methods, the sector appears ripe for blockchain disruption—though the text mentions no specific cryptocurrencies or exchanges currently addressing this pain point.