PIMCO and Moody's report on growing concerns in the private credit sector due to rapid growth, elevated leverage, and the first-ever net outflows in the first quarter, with AI adding further risk.

PIMCO strategist Lotfi Karoui attributes growing private credit concerns to rapid growth and market imbalances. Moody’s reported that the sector experienced its first-ever net outflow in the first quarter, driven by an exodus from nontraded vehicles—which comprise 60% of sector assets—and elevated leverage. Despite robust inflows as recently as the third quarter of 2025, analysts warn that artificial intelligence will act as a "disruptive force" putting the sector on defense.

• • PIMCO's Lotfi Karoui attributes private credit concerns to imbalances and rapid growth.
• • Moody’s reported the first-ever net outflow for the sector in the first quarter, driven by an exodus from nontraded vehicles, which comprise 60% of sector assets, and elevated leverage.
• • Moody’s analysts identify artificial intelligence as a disruptive force expected to put the sector "on defense" in the coming year.

PIMCO strategist Lotfi Karoui attributes growing private credit concerns to rapid growth and market imbalances. Moody’s reported that the sector experienced its first-ever net outflow in the first quarter, driven by an exodus from nontraded vehicles and elevated leverage. Despite robust inflows as recently as the third quarter of 2025, analysts warn that artificial intelligence will act as a "disruptive force" putting the sector on defense.

• • PIMCO's Lotfi Karoui attributes private credit concerns to imbalances and rapid growth.
• • Moody’s reported the first-ever net outflow for the sector in the first quarter, driven by an exodus from nontraded vehicles and elevated leverage.
• • Moody’s analysts identify artificial intelligence as a disruptive force expected to put the sector "on defense" in the coming year.