Private equity is the new bank

The Sterling Group is a Texas private equity firm that has focused on mid-market buyouts for more than 30 years. But now it's raising up to $225 million for its first-ever private credit fund, according to an SEC filing. This comes one day after Capital Dynamics said it was launching a private credit business, which itself followed numerous similar announcements from private equity shops that look a lot more like Sterling Group than giants KKR or Blackstone (which began building credit arms years ago).

• Numbers: Private credit funds raised $21.1 billion in Q1 2017, which was up 63% over the same period from last year, according to EY. Over half of that was for direct lending.
• Why it matters: We hear a lot from politicians about how "banks have stopped lending" to anything but the largest of companies, thus requiring a rollback of financial regulations. But if you buy the first part of that argument, it seems that private equity is moving in to fill the void.