“Shadow finance” firms are preparing for increased scrutiny as at least half a dozen private credit funds have agreed to participate in a stress test exercise conducted by the Bank of England. This move follows recent financial difficulties experienced by firms like First Brands and Tricolor in the United States. According to the Financial Times, prominent firms including Blackstone, KKR, Apollo, Ares, and the British-origin European manager CVC are among those participating. Representatives from the funds declined to comment on the matter.
Collectively, these firms manage over $1.5 trillion in credit across various strategies, with Apollo accounting for approximately half of that total. The Bank of England is expected to publish a complete list of participating firms later this week, and the scope of the exercise may expand to include additional entities.
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