U.S. private credit has grown fivefold since 2009 to $1.34 trillion, transforming from a niche segment into a core portfolio allocation. High-net-worth individuals and institutions have driven the growth of this historically gated asset class. Retail investors and 401 (k) plans have had their investment options primarily limited to public markets, which are increasingly dominated by passive investment strategies.

First, heightened fee consciousness (fomented by John C. Bogel, the Prophet of Passive, and amplified by Warren Buffett, amid his peak cultural zeitgeist) enabled passive funds to capture share from active managers throughout the 2000s. Last year, total passive AUM surpassed active, accounting for 53% market share.

The shift towards passive investing has had profound market impl

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