Ken Moelis Outlines Shift from Bank Lending to Private Credit

Ken Moelis, speaking at Goldman Sachs' financials conference, revisited the strategic move he made by founding Moelis & Co. just before the 2008 crisis—a decision that allowed the firm to hire available bankers and raise funds when major banks faced failures. He explained that regulatory changes have paved the way for the financial system to transition from a traditional bank-centric model to one dominated by private credit, life insurance, and sovereign wealth funds. Moelis noted that nearly $20 trillion in below-investment-grade credit may shift from banks to private credit managers.

In his remarks, Moelis emphasized the growing role of independent advisory firms in facilitating this transformation. Reports from Financial Times (December 2024) and Bloomberg (December 2023) further highlight how major alternative investment managers, including KKR and Blackstone, are pivoting from private equity to private debt, reinforcing the idea that future transactional finance will rely on these new structures over traditional banking methods. Moelis & Company’s recent steps, such as the appointment of Matt Wesley as Global Head of Private Funds Advisory in February 2025, underscore the industry's broader commitment to capitalizing on these changes.