Private Credit
Private Credit offers a unique avenue for investment, catering to those seeking opportunities beyond traditional public markets. It involves lending that isn’t publicly traded, often through privately negotiated loans.
- Returns: Private Credit pursues diverse sub-strategies and risk-return targets, aiming to outperform public debt with lower volatility. This may include attractive yields, such as those offered by floating-rate direct lending strategies. However, higher returns may come with increased default risk depending on the manager’s expertise, making manager selection crucial.
- Downside protection: By prioritizing debt over equity, Private Credit offers a lower-risk exposure. Debt holders rank higher in the payout order, providing a protective buffer against downside risks compared to equity investments. Nonetheless, the level of downside protection depends on the strength of the covenants.
- Diversification: Private Credit provides access to a variety of strategies unavailable to traditional credit funds, enhancing portfolio diversification. Moreover, Private Credit typically exhibits lower cyclicality compared to traditional assets, further bolstering diversification benefits.
- Active management: Private Credit offers active management capabilities, allowing for direct influence on underlying debt/assets. For instance, we can collaborate with lenders to navigate and potentially improve challenging situations as needed. However, since these are private loan assets, the liquidity profile is lesser than that of Private Credit, which may pose a challenge for some investors.
Our offering
We provide solutions tailored to meet our clients’ preferences, investment knowledge, and requirements, offering both closed and open-ended structures.
To learn more about our Private Credit solutions, please reach out to your relationship manager.