(Bloomberg) -- PGIM Chief Executive Officer David Hunt said the private credit market is headed for a “shakeout” as investors set higher standards for which managers they choose.

“Institutional investors are much pickier,” Hunt said Tuesday on Bloomberg TV. “We’re seeing fewer managers raise more money.”

Investors increasingly want to see credit managers with longer track records and more considerable experience in the market, he said.

“Your ability to just set up a new shop and raise money is a lot less now than it was three years ago,” Hunt said. “There will be a bit of a shakeout in that — and that is no bad thing.”

PGIM believes institutional and retail investors will to continue to invest in private markets and private credit specifically. The direct lending and asset-based finance markets will keep growing as banks rein in lending to comply with more stringent capital requirements, according to Hunt.

“The good news is that actually private credit — particularly direct lending — is actually maturing,” Hunt said.

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