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Sitting inside the $1.8trn private credit industry can feel like strapping into a space shuttle, heating up as it accelerates through the financial atmosphere.

Legacy investors are still pouring into the asset class. Retail investors are now realistic targets for sales pitches. Growth trajectories are projected to be steep for years to come, with Moody’s expecting a jump to $3trn by 2028. Oxygen is flowing, fuel is combusting and altitude is increasing - all systems go, right?

Not quite: there are at least a few blinking lights on the dashboard of STS Private Credit as it strives to reach new heights. Billions of dollars in losses and questions of fraud and risk are posed by the now-bankrupt First Brands and Tricolor. The US economy’s growth is expected to slow down and the strength of the American consumer is in question. There’s also gravitational pull: the tension between the need to innovate for a broad audience and the limits of liquidity for illiquid assets.

Lenders, lawyers and fund managers had these issues on their minds this week as they flocked to Florida — not to Cape Canaveral, but to Miami Beach for the Private Credit Connect conference presented by FT Live and the Fixed Income Investor Network.

All of the above ingredients have combined for intense G-forces - dropping the space travel metaphor, there is immense pressure to close deals quickly. As 9fin colleagues in Europe observed last week, lender educations are often being dropped from processes in order to speed them up.

Fred Chung of Adams Street Partners said his firm has had to turn down opportunities to underwrite financings because the timelines to do so have seemed too aggressive to allow for proper due diligence.

“How can you underwrite a five-year illiquid loan in two weeks?” Chung asked rhetorically.

A White & Case paper this week found that dealmaking for secondary buyouts has hit its fastest pace in 2021, a surge that “reflects GPs ongoing search for liquidity and portfolio balance,” said Alex Chauvin, a partner at the law firm.

So those that have exposure to a good credit are bedding in. Private credit lenders have repricing existing deals in order to fend off attempts from the broadly syndicated loan market, where spreads have compressed over the course of 2025, 9fin has reported. Lenders to Highstreet Insurance Partners have shorn 100bps from their coupon since January. Meanwhile, Morgan Stanley’s private credit arm has offered more debt to student transport firm EverDriven to fund a dividend recap, 9fin reports.

Conference panelists time and time again defended their industries against the stain of First Brands and Tricolor, with JPMorgan Chase CEO Jamie Dimon warning about “cockroaches” on his company’s recent earnings call with analysts.

Investigations are continuing and bankruptcy proceedings are unfolding, and public scrutiny has broadened to regional banks amid concerns of exposure to alleged fraud.

Anticipating questions about underwriting standards, lack of transparency and over-leveraged borrowers, Ares’ Ryan Brauns argued that the industry was well-positioned to defend itself against systemic risk. That’s in part because the illiquid loans that make up the core of the private credit industry by definition stay close to home as opposed to being sold on to a broader market, he said.

“We police ourselves because we’re not in the moving business like a bank. We’re in the storage business,” Brauns said, adding, “I’m not trying to start a cockroach fight with Jamie Dimon.”

One bank source in attendance acknowledged that a blow-up like First Brands can make investors more skeptical about new opportunities, particularly in the asset-backed finance corner of private credit.

But cleaner solutions in the same vein - such as a supply-chain financing arrangement that’s simpler than First Brands’ opaque mix of invoice factoring and reverse factoring - could start to look more attractive by comparison, they added.

“When there’s a story in the news, you have a lot of explaining to do,” the banker said.

As private credit sizzles, there are opportunities aplenty for lenders to step in and provide capital to borrowers. The sustained momentum has led to a competitive landscape that one direct lender in attendance described as heavily based on relationships..

“If I can do a $30m deal, and I’m doing half of it and I can control the documents and I can drive a private process,” the lender said, “I’m OK to cut in one or two other people who might be co-op fishing. And in the next deal, I’ll be brought in by them.”

The growth of private credit and the juicy yields it offers have long been the fare of large institutional investors like insurance companies and pension plans.

As the industry’s menu gets bigger, firms are setting up tables for new and hungry customers in the retail wealth space: mass affluent investors looking for higher yields and even regular folks diligently filling their 401(k)s.

Monroe Capital’s Christopher Lund said he expected the industry to meet the new retail wave halfway by trying to provide “semi-liquidity” — though the underlying private credit assets in new vehicles and structures aren’t suddenly becoming more liquid.

“There are ways to do that prudently…but the asset class needs to be careful on this,” Lund said.