The private-credit boom promises high returns and flexibility - but is the shine justified?

Private credit is booming - but beneath its reputation for stability and diversification lies a more complicated story.

In this episode, hosted by Michelle Martin, Morningstar’s Senior Analyst Arvind Subramanian breaks down what private credit really is, why borrowers and investors are piling in, and the key marketing claims investors should interrogate.

He explains how low volatility may reflect opacity rather than safety, why diversification benefits are overstated, and how floating rates can both protect and punish portfolios.

We also unpack the hidden risks around leverage, liquidity, and covenant protection.

Ultimately, private credit can play a role, but investors need to scrutinize fees, transparency, and risk.