Finance
Blackstone's Schwarzman plays down private credit concerns over bankruptcies
Published by Global Banking & Finance Review®
Posted on December 9, 2025
2 min readLast updated: January 20, 2026
Quick Summary
Blackstone CEO Stephen Schwarzman downplays concerns over private credit's role in auto sector bankruptcies, emphasizing bank involvement.
Blackstone CEO Addresses Private Credit Concerns Amid Bankruptcies
By Utkarsh Shetti and Tala Ramadan
ABU DHABI, Dec 9 (Reuters) - Blackstone CEO Stephen Schwarzman said on Tuesday that he did not share market concerns over private credit relating to recent bankruptcies in the autos sector.
"There were several bankruptcies that were popularized in October ... and they were blamed on private credit," Schwarzman said in a video presentation during Abu Dhabi Finance Week.
"In fact, all three deals were due diligence by banks, underwritten by banks, syndicated by banks, and private credit was sort of not in the room," he added.
The collapse of First Brands and subprime auto lender Tricolor has forced some debt investors to cut their exposure to certain sectors over concerns of weakness in consumer and auto lending and prompted a slowdown in the credit rally.
The fallout has sharpened scrutiny of a market that has grown quickly, with heavy institutional investment and rising corporate lending in recent years.
Schwarzman said banks were leveraged at least 10 to 1, while private credit was around 1.4 times, adding "private credit is actually much more conservative for the system".
(Reporting by Utkarsh Shetti and Tala Ramadan in Abu Dhabi; Editing by Alexander Smith)
Key Takeaways
- •Stephen Schwarzman dismisses concerns over private credit.
- •Recent bankruptcies in the auto sector were bank-driven.
- •Private credit is more conservative compared to banks.
- •First Brands and Tricolor collapses prompt market scrutiny.
- •Private credit market has seen rapid growth recently.
Frequently Asked Questions about Blackstone's Schwarzman plays down private credit concerns over bankruptcies
1What is private credit?
Private credit refers to non-bank lending to companies, typically by private funds or institutional investors. It provides an alternative to traditional bank financing, often with less regulation and more flexible terms.
2What are bankruptcies?
Bankruptcies occur when individuals or businesses are unable to repay their debts. It is a legal process that allows them to eliminate or repay some or all of their debts under the protection of the bankruptcy court.
3What is due diligence?
Due diligence is the investigation or audit of a potential investment or product to confirm all facts, such as reviewing financial records and legal compliance, before proceeding with a transaction.
4What is consumer lending?
Consumer lending refers to the process of providing loans to individuals for personal use, such as buying a car, financing education, or consolidating debt. It includes various types of loans like personal loans and credit cards.
5What are corporate bonds?
Corporate bonds are debt securities issued by companies to raise capital. Investors purchase these bonds, effectively lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value at maturity.
