Credit | Investment Insight
June 12, 2024
Flexibility Is Key: Why Invest Opportunistically in Private Credit
Capital markets have, in our view, entered a new regime of higher volatility that can create attractive opportunities for investors who add flexibility to private credit portfolios. An opportunistic approach can lead to more diversified portfolios and higher risk-adjusted returns. We see attractive opportunities in private corporate credit, asset-backed finance, and dislocated credit.
KEY TAKEAWAYS:
- Capital markets have, in our view, entered a new regime of higher volatility that, when properly managed, can create attractive opportunities for investors who are open to adding flexibility to private credit portfolios.
- A flexible, relative-value based mandate can allow investors to allocate dynamically across the credit spectrum, capitalizing on opportunities that arise during different market regimes, especially periods of dislocation.
- An opportunistic approach can lead to more diversified portfolios and, ultimately, potential higher risk-adjusted returns. In today’s environment, we see attractive opportunities to allocate among private corporate credit, asset-backed finance (ABF), and dislocated credit.
- We see investors deploying flexible strategies alongside private credit, as a multi-asset class strategy, or as an “opportunistic” sleeve of credit portfolios.
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