BlackRock Inc.'s Scott Kapnick predicts that major players in private credit will capitalize on current market turmoil while smaller firms struggle. Speaking at Bloomberg Invest, Kapnick said scaled players will continue benefiting from this period of industry stress, while niche operators face tougher conditions.

Private credit executives have weathered weeks of investor scrutiny over the $1.8 trillion industry's resilience amid writedowns, rising defaults, and AI-disrupted software bets. From Blue Owl Capital Inc. to Blackstone Inc., the biggest firms confront retail investor withdrawals and their worst share performance start in a decade. Kapnick identified particular challenges for smaller borrowers facing tariffs, labor costs, and higher interest rates.

Kapnick noted that software investments from 2021-2022 vintages, heavily funded by private equity and institutional investors at premium prices, may face pressure as they mature. The comments come as BlackRock pursues its $12 billion acquisition of HPS Investment Partners, part of CEO Larry Fink's strategy to transform the firm into a leading private credit and infrastructure player. The integration of HPS represents BlackRock's push to compete with established private credit giants.