Since the Global Financial Crisis, private credit has evolved from a niche financing solution into a mainstream institutional asset class, now competing in scale with high yield bonds and leveraged loans. According to data from analytics provider Greenwich Coalition, 42% of institutional investors in the U.S. and Canada intend to increase their private debt allocations over the next three years. This may lead to total assets under management reaching $3 tn by 2028, projects rating agency Moody’s.
HarbourVest proposes a portfolio construction framework to help investors navigate this increasingly complex landscape, outlining key market segments and assessing trade-offs between implementation approaches.
“There are four crucial steps for determining broad allocations to the credit segments,” outlines Peter Lipson, Managing Director at the private equity investment manager in Boston. “These include strategic sub-segment positioning, diversification implications, and relative risk/reward considerations.”
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