Private credit investment services

Private credit, also often referred to as direct lending, is a type of investment process where you personally lend money to a business or potential investment opportunity with the expectation of receiving interest payments in return, rather than buying traditional stocks, shares, or bonds.

This type of investing can be seen as high-risk due to its direct nature. However, because you’re directly investing private credit funds into a company, you’re able to maintain relatively high control over the terms of the loan and its repayment process. 

Private lending is typically focused on using long-term investment strategies for a steady rate of investment returns, with management available across personal, business, and family office services. 

As a result, private credit offers an alternative avenue for investment, catering to those seeking opportunities beyond traditional public markets and lending options that aren’t publicly traded, often via privately negotiated loans.

Therefore, you may want to consider adding direct lending to your investment portfolio for the following reasons:

• 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 (i.e. the interest rate on the loan changes over time). 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 covenant.
• Diversification: Private credit provides access to a variety of strategies unavailable to traditional credit funds, enhancing portfolio diversification. Moreover, private credit investing typically exhibits lower cyclicality compared to traditional assets, further bolstering its potential diversification benefits.
• Active management: Private credit funds can be actively managed, 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 other investment types, which may pose a challenge for some investors.