Wall Street executives are noticing a growing convergence between private credit and traditional bank debt, with predictions that borrowers may soon find it difficult to differentiate between the two.

Marc Rowan of Apollo Global Management expects that within 18 months, the distinction between the two will become significantly blurred as private credit providers expand their offerings. The private credit market, which is valued at $1.7 trillion, has experienced growth by catering to private, non-investment-grade companies that often struggle to secure traditional bank financing.

However, major asset managers such as Apollo and Blackstone are now shifting their focus to lending to more established businesses, positioning themselves to directly challenge traditional banking institutions.