Despite ongoing inflationary pressures, Centerbridge Partners sees significant potential in the US consumer credit market for 2025, and is set to target areas including consumer loans, home equity lines of credit (HELOCs), and data centre financing, according to a report by Bloomberg.
Aaron Fink, Head of Asset Finance at the New York-based private equity firm, expressed optimism about the sector’s resilience. “You had the worst performance on record in 2021 and 2022 for many consumer sectors, but it’s always post-blow-up that we want to be there originating,” Fink said during a Bloomberg Intelligence Credit Edge podcast. “Consumers are still in a pretty strong place.”
While US households have grappled with persistent inflation and higher borrowing costs, consumer spending has remained robust. December saw a smaller-than-expected rise in consumer prices, renewing hopes for Federal Reserve rate cuts in the near future. However, Fink cautioned that a weakening labour market could pose risks.
“The rising cost of goods and interest rates will have an impact,” Fink said. “If we see deterioration in jobs and the broader labour market, that’ll be problematic.”
Centerbridge is focusing on subprime and near-prime borrowers, finding opportunities in HELOCs — a $2tn addressable market — driven by rising US home values. According to Fink, home financing products are well-positioned to support consumer needs like debt consolidation and home improvement projects.
“Consumers are increasingly locked into their homes,” Fink said, pointing to strong demand in the sector.
Another area of focus for Centerbridge is the booming data centre industry, which is critical for supporting artificial intelligence growth. “There is an immense capital need,” Fink explained, highlighting the firm’s interest in financing the infrastructure underpinning AI advancements.
With approximately $38bn in assets under management, Centerbridge employs diverse strategies, including private equity, private credit, and real estate. In 2024, the firm acquired a $400m consumer loan portfolio from fintech company Upstart Holdings, demonstrating its commitment to the consumer credit market.
