What does the future hold?

Stability, diversification, and exciting opportunities: these are only some of the reasons to invest in private credit today.

As Joe Sciortino, Head of Multi-Managers Private Credit explains, private credit offers stable returns because it gets closer to the fundamentals of the assets, whether we’re talking corporate or real estate.

When lenders provide direct loans to those assets, the loans are non-tradable, and therefore not exposed to the volatility of the market. This key benefit of private credit has been highlighted given the recent increase in volatility. Looking forward Joe expects lenders with clean balance sheets to earn above-market risk-adjusted yields.

So what does the future hold?

The conservative approach adopted so far will allow for a more opportunistic one in the future, favoring a portfolio with short duration, core income assets focused on asset-backed type lending strategies.

With this regard, Europe and the corporate sector offer good ground. Still, the current inflationary environment poses risks for all assets classes. In fact, despite private credit being mostly floating-rate and generating high yields and having some volatility protection, it still can be impacted by a certain degree of risk.

As Joe mentions, it’s about “picking your spots and being in the right underlying credits”. Watch the short videos to hear more.