Private credit minted 18 billionaires worth $61B combined — and the boom is still going
Feb 21, 2025
Key Points
- Private credit has created 18 billionaires worth $61 billion combined as the sector's assets tripled to $1.6 trillion in a decade, driven by institutional investors chasing higher yields.
- Most private credit billionaires are men in their fifties and sixties who trained under Michael Milken at Drexel Burnham Lambert in the 1980s junk bond boom before pivoting to leveraged buyouts.
- Embedded financing from Stripe, Shopify, and platforms like Boulevard now competes directly with traditional private credit firms, threatening returns as too many funds chase the same deals.
Summary
Private credit has minted 18 billionaires worth $61 billion combined, and the sector shows no signs of slowing despite warnings of froth.
The Bloomberg Billionaires Index identified executives across seven firms who built their fortunes in the once-obscure corner of finance. Together, they rank above Steve Schwarzman, Blackstone's cofounder, as a collective. Only Tony Ressler at Ares Management ranks near the top of finance individually.
The numbers are staggering. Ares and Blue Owl each produced four billionaires. Scott Kaplan at HBS built $4 billion. Lawrence Galoob at Galoob Capital and his brother David Galoob each sit at $3.3 billion. Doug Ostrover at Blue Owl reached $3.2 billion. The list goes on—nearly everyone at the top is now a billionaire.
How the boom happened
Private credit assets have more than tripled in a decade to $1.6 trillion, as institutional investors and wealth individuals chase higher yields. Fund managers capture steep fees plus a share of gains—a lucrative formula. The sector finances companies squeezed out of public bond markets or deemed too risky for traditional banks. Think Red Bull or single-digit billion dollar stable companies that can't yet access cheap public debt.
The demographic profile is narrow. All 18 billionaires are men, all but two in their fifties and sixties. Thirteen attended Ivy League schools. Most cut their teeth during the 1980s junk bond boom under Michael Milken at Drexel Burnham Lambert, before shifting into leveraged buyouts and eventually private credit. Ares, founded 28 years ago, sits near the genesis of this path. Tony Ressler worked alongside Leon Black at Apollo before cofounding Ares with fellow Drexel alumnus John Kissick and others.
Ares' public stock has nearly tripled since early 2022, raising its market value above $60 billion. That performance alone cemented four senior executives in the multibillion dollar club.
The private credit boom is reshaping startup financing
The conversation turned to whether AI-driven business models—which require less upfront R&D spend—might change how startups finance growth. Historically, venture capital funded engineering headcount. But if a company reaches $100 million ARR with 30 people, distribution costs (ad spend) become the constraint, not R&D. That shifts the financing question: equity versus debt.
For hot companies like Cursor, raising $100 million at a $2 billion valuation (5% dilution) is cheap capital. For cooler companies, venture debt makes sense—borrowing at roughly 10% to cover working capital gaps. The tension is structural. Debt is cheaper when times are good. If a company misses a covenant, the creditor can seize it. Equity is expensive but forgiving.
Embedded finance products muddy the picture. Stripe and Shopify now offer debt financing directly to merchants. Pipe, which initially struggled when rates rose, pivoted to embedded financing—letting platforms like Boulevard (software for barbershops) offer working capital loans to end customers. That distribution model competes directly with traditional private credit firms.
Froth and competition
The segment aired memes mocking the private credit gold rush. One joke: a 28-year-old with a $6.3 billion family fortune raising a $50 million fund. Another: "My dad was early at GSO. Let's start a fund together." The implication is clear—many people are trying, and many will fail.
Banks still offer financing. Fintech platforms now offer it embedded. Too many funds chasing the same deals will eventually compress returns. When that happens, funds will fade. The cycle repeats in any hot category.
Why it matters
Private credit sits between venture capital and traditional lending—higher risk than bonds, lower dilution than equity. For the right company at the right moment, it bridges a gap. For others, it's an expensive trap. The 18 billionaires prove the model works at scale. Whether that scale survives tighter competition and slowing deal flow is an open question.