Alternative asset management firms have extended nearly $560 billion in fresh financing to American companies during the past three years, resulting in the creation of over 6.5 million jobs, according to new research from the Managed Funds Association obtained by Reuters.
The findings highlight how essential alternative asset managers have become in supporting business operations and the overall economy, as this sector has experienced rapid growth during the last decade while investors have increased their commitments to private market opportunities.
When conventional banking institutions pulled back from higher-risk lending due to tightened regulatory requirements in recent years, private credit companies moved in to bridge the financing gap.
The MFA calculates that private credit financing activity since 2023 has produced approximately $897 billion in nationwide economic impact, with California, Illinois and Texas capturing the biggest portions.
“Alternative asset managers provide a meaningful contribution to the U.S. economy and everyday Americans. Regulators should continue fostering a regulatory framework that encourages these benefits nationwide,” MFA CEO Bryan Corbett said.
The Washington, D.C.-based MFA, which represents the global alternative asset management industry, analyzed private credit and hedge fund investment data from BlackRock’s Preqin and federal datasets for the report.
Commitments to hedge funds by pensions, university endowments and non-profit foundations across the U.S. have surged to approximately $1.6 trillion, as investors seek to finance long-term financial obligations.
Institutional investors utilize hedge funds to diversify their holdings and produce consistent long-term gains. Pensions dominated with $940 billion invested in hedge funds, while non-profit foundations have committed $510 billion.
New York, California and Texas lead as the primary states for institutional hedge fund commitments.
Private credit loans to U.S. businesses by year: 2023 – $163.6 billion; 2024 – $157.6 billion; 2025 – $238.7 billion
Pension, foundation, and endowment allocations to hedge funds (growth over time, not annual investment totals): 2023 – $1.43 trillion; 2024 – $1.44 trillion; 2025 – $1.56 trillion
