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Private Credit

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

Risks of investing in private markets

The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Past performance information presented is not indicative of future performance. The return and costs may increase or decrease as a result of currency fluctuations. 

  • Liquidity Risk - Investors may be unable to dispose of an investment quickly and at a price that’s closely related to recent similar transactions. There is no guarantee of distributions and no established secondary market.
  • Event Risk - A significant event may cause a substantial decline in the market value of all securities. 
  • Long-term Horizon - Investors should expect to be locked-in for the full term of the investment, which is subject to extensions.
  • No Capital Protection - Investors may lose the entirety of invested capital.
  • Unpredictable Cashflows - Capital may be called and distributed at short notice.
  • Economic Conditions - Ability to realise/divest from existing investments depends on market conditions and the regulatory environment.
  • Risk of Forfeiture - Failure to make call payments could result in forfeiture of commitment, including invested capital, without compensation.
  • Default Risk - in the event of default investors risk losing their entire remaining interest in the vehicle and may be subject to legal proceedings to recover unfunded commitments.
  • Reliance on Third-party Management Teams - Underlying investments will be managed by various third-party management teams that will in aggregate determine the eventual returns for the investor.

The risk factors listed above are not exhaustive, always refer to product specific documentation for full details and risk disclosures. 

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