Morgan Stanley CEO says private credit market in 'adolescent moment'

Investing.com -- Morgan Stanley Chief Executive Officer Ted Pick said Wednesday that the $1.8 trillion private credit market is undergoing increased scrutiny as part of its "adolescent moment."

"While it's still a growing class, it's having a learning moment," Pick said on an earnings call with analysts. "We'll call it an adolescent moment, where both the lenders and the borrowers are being looked at carefully."

Pick said he believes the market has "extraordinary growth potential" and that credit will perform well when the economy is in good shape. The past few weeks have spurred learning about the asset class that is "very healthy," he said.

Scrutiny over the asset class has increased in recent weeks over concerns about valuations and the impact of artificial intelligence on certain borrowers.

Morgan Stanley's exposures to the asset class are "modest," Pick added. Chief Financial Officer Sharon Yeshaya said in an earlier interview Wednesday that the "vast majority" of the firm's lending to business-credit intermediaries is direct-lender financing, a $20.1 billion figure as of the fourth quarter, according to regulatory filings.

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