Blackstone, Apollo and KKR Join Bank of England Private‑Credit Stress Review

Major US private capital firms Blackstone, Apollo Global Management and KKR have agreed to participate in a Bank of England-led review of private credit, according to the Financial Times. The move reflects growing regulatory concern about systemic vulnerabilities arising from the rapid expansion of non‑bank lending and privately originated debt.

The review, described by regulators as a stress assessment rather than a formal, binding test, aims to map exposures, assess liquidity and contagion channels, and evaluate how shocks in private credit markets might propagate through the UK financial system. Private credit — increasingly used by mid‑market borrowers and leveraged buyouts — has grown substantially in recent years, raising questions about transparency, leverage and potential spillovers to banks, insurers and other institutional investors.

Participation by the three firms, which manage large private debt platforms and provide capital across direct lending, mezzanine and opportunistic credit strategies, signals cooperation between regulators and influential market participants. While Blackstone, Apollo and KKR operate globally and cater predominantly to institutional investors, the BoE’s review seeks to understand cross‑border links and where UK financial intermediaries could face knock‑on effects.

Regulators are focusing on a range of risks: maturity and liquidity mismatches in closed‑end funds, concentration of exposures to specific sectors or borrowers, leverage embedded in vehicles that invest in private credit, and the operational challenges of valuing illiquid debt in stressed markets. The exercise is also expected to probe contingency plans and stress scenarios used by asset managers and their counterparties.

Industry participants have argued that private credit provides valuable financing alternatives to banks and supports economic activity. But officials have pushed for greater data sharing and scenario analysis to reduce blind spots in the financial system. The results of the review could prompt stronger reporting requirements, more stringent liquidity management expectations, or targeted guidance for participants operating at scale in private markets.

The Bank of England and other UK authorities say the review is part of wider efforts to shore up resilience after a period of rapid growth in non‑bank finance. While voluntary participation limits the immediate regulatory bite, the engagement of prominent US groups underscores the seriousness with which both regulators and market players are treating potential systemic risks in private credit.