Asset-Based Finance: A Fast-Growing Frontier in Private Credit

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The impressive speed at which private asset-based finance (ABF) has expanded in the wake of the Global Financial Crisis is a sign of an ongoing structural shift that we think will continue to drive strong growth. Considered alongside its potential investment benefits, we think the asset class has earned investors’ attention.

The private ABF asset class at the end of 2022 was 67% bigger than in 2006 and 15% bigger than it was in 2020. Its share of the overall asset-backed market has risen from just over one-third in 2006 to nearly half today. The outlook for the future is equally promising, with the market expected to grow from $5.2 trillion to $7.7 trillion by 2027. Higher inflation, the pullback of traditional lenders in response to rising interest rates, and the outbreak of volatility in the banking system are all likely to increase the need for private ABF.


The Private ABF Market’s Rapid Growth Seems Set to Continue

Graph of The Private ABF Market’s Rapid Growth
Source: Integer Advisors forecasts and KKR research estimates as of October 31, 2022.
  1. Credit