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‘Accidents waiting to happen’ in private credit, says Wellcome Trust

Rating agency KBRA also warns on possible rise in defaults in fast-growing sector
Nick Moakes says private equity managers have been able to borrow large amounts of money with minimal checks and balances

There are “accidents waiting to happen” in private credit because of looser lending standards and the vast amount of capital that has flooded into the sector, the chief investment officer of one of the world’s largest charitable foundations has warned.

The £37.6bn Wellcome Trust’s Nick Moakes told the Financial Times that big investors in such funds could suffer “very substantial” losses if the US economy eventually falls into recession.

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