Hedge funds including Millennium Management, Point72 and Third Point, are ramping up their push into private credit, eager to capitalise on a booming market and diversify their businesses beyond liquid trading strategies, according to a report by the Financial Times.

Third Point, traditionally known for its activist equity strategies, plans to launch a publicly listed private credit fund next month. Dubbed Third Point Private Capital Partners, it will provide direct loans to businesses.

Millennium, meanwhile, which manages over $75bn in assets, is considering creating a separate fund focused on less liquid assets, including private credit. If launched, it would be the first new fund in the firm's 30-plus-year history.

Earlier this year, Point72 hired Todd Hirsch, previously a senior managing director at Blackstone, to spearhead its private credit initiative. Hirsch has since recruited several industry veterans to build out the platform, including Alex Greeley from Linden Partners, Jay Ditmarsch from Carlyle, and Rudder Zhang from Brookfield Asset Management.

Private credit, which spans non-bank lending from corporate loans to esoteric debt tied to royalties, has grown rapidly as asset managers step in where banks have retreated. For hedge funds accustomed to trading liquid securities, the shift offers a way to lock in more stable capital, elevate firm valuations, and appeal to large institutional clients seeking a one-stop shop.