A top US securities regulator said retail investors should “get out of the kitchen” if they cannot “take the heat” of investing in private credit, dismissing fears the asset class may threaten financial stability.
The comments by Securities and Exchange Commission chair Paul Atkins indicate US regulators are doubling down on their push to encourage average American workers to put more of their retirement savings into the $1.8tn market for loans to riskier borrowers, including private equity-backed companies.
Critics say the private credit industry’s relatively illiquid assets are poorly suited to the demands of retail investors to have quick access to their savings. Investors sought to pull more than $20bn from the asset class in the first quarter.