War Will Make the 'Private Credit' Bubble Collapse Faster

The biggest investors in the firms which manage “private credit”—unregulated and illiquid loans to small and medium-sized companies, many of them in software—are the small group of Persian Gulf oil kingdoms, that have invested their sovereign wealth funds to the tune of $90 billion. That exposure was quadrupled between 2021 and 2025, with Abu Dhabi’s sovereign fund, known as the Mubadala, invested 5% ($24 billion) into private credit, closely followed by Kuwait, Qatar, and Saudi Arabia.