From Yahoo Finance: 2025-06-10 14:33:00

Moody’s Ratings warns of liquidity and asset quality risks as retail investors flock to private markets. Asset managers are creating funds for retail demand, but concerns arise over transparency and underwriting standards. With public listings declining, private markets are on the rise, with asset managers turning to retail capital for growth.

Under the current U.S. administration, regulatory focus in private markets has shifted towards accelerating capital formation. Asset managers are offering products with periodic liquidity windows to meet retail investors’ expectations for quick access to cash. However, sudden redemption requests in volatile markets could strain funds, creating a liquidity mismatch.

Competition for high-quality assets in the private credit sector intensifies as asset managers may take on greater risks to meet demand. Moody’s Ratings cautions against investing in lower-quality assets to keep pace with surging demand. The shift towards retail capital in private markets raises concerns about liquidity, transparency, and underwriting standards.



Read more at Yahoo Finance: Moody’s flags risks from retail investors’ push into private credit