Private equity firms are pooling and repackaging troubled corporate debt in an effort to raise liquidity. This comes amidst heightened redemptions from private credit funds due to fears of potentially bad loans in certain sectors due to the rise of artificial intelligence and a higher-for-longer short-term interest rate regime. Firms are securitizing loans and combining them with higher quality debt into larger investment vehicles to extend their shelf lives ahead of maturities. They are also selling off portions of larger funds to manage exposures. While loan defaults haven't occurred en masse, default rates are elevated, according to multiple ratings agencies. Private equity firm Carlyle Group is building out a new structured finance vehicle to repay investors in its older private equity funds. Insurance Insurance is another area where financiers are getting creative, with ratings agencies monitoring developments. Fitch warned about potential downgrades from the insurance sector from the National Association of Insurance Commissioners (NAIC). The International Bank for Central Banks, based in Switzerland, has also warned of liquidity risks stemming from the growing involvement of the life insurance sector.