Insights

Private Credit Strategies: An Introduction

Private credit offers distinct advantages and appeal in a low return environment, but investors should be aware that behind the name is a diverse array of strategies, some more familiar to institutional investors than others, each with idiosyncratic risks. In this report, we describe the broad array of private credit strategies and position them along the risk/return spectrum, review the investment process, discuss expectations for the performance of these strategies in various parts of the economic cycle, and highlight some key risks for investors to consider.

May 2024

The Divestment Question: Focus on Governance

“Divest now!” Passionate voices are demanding distance between the endowment and investments that can be connected to war and human suffering. Divestment campaigns may seek to influence change, take an ethical investing stance, and/or ensure that the capital of the institution they care about does not fund or profit from a cause or actions they […]

May 2024

Video Series: Private Credit Investing

The private credit landscape has grown steadily over the past 15 years, cementing its importance and value in investor portfolios. In this video series, we explore what makes private credit investments so attractive and answer a number of key questions – including where to find opportunities, how to incorporate private credit in portfolio construction, and […]

April 2024

Private Credit Markets Are Growing in Size and Opportunity

For many investors, 2024 started where last year left off. Hopes of an economic soft landing are growing, inflation is slowly receding, and last year’s winners (e.g., mega-cap growth stocks) continue to rip higher. Credit markets have seen more muted gains after a gangbuster fourth quarter 2023, but strong demand and rising confidence mean issuance […]

April 2024

Should Investors Consider Allocating to US Commercial Real Estate Debt?

Yes. A record of roughly $925 billion of US commercial real estate (CRE) debt is maturing in 2024 and refinancing needs in future years are also significant. Some of these loans will be extended, but most will need to be refinanced; simultaneously, many traditional lenders are pulling back. The resulting rise in spreads, combined with […]

April 2024

Have Public Market Returns Permanently Eclipsed Private Market Returns?

No, while the public market’s outperformance may seem like a total eclipse, this one, like all eclipses, will be temporary. At present, short-term private equity returns do not compare favorably to those of public benchmarks. For the nine months ended September 30, 2023, global private equity and global venture capital underperformed the MSCI ACWI on […]

April 2024

Role Models: Pensions Can Use Data to Optimize PI Allocations

Tapping private markets in search of added returns is common practice among defined benefit pensions and other institutional investors. However, many pensions still avoid private investments (PI) out of fear that long-term capital lockups could elevate liquidity risk. Some also remain alarmed by the potential consequences of the “denominator effect.” This refers to situations in […]

April 2024

Has the Euro Area’s Economy Bottomed?

Yes, we believe that the euro area’s economy bottomed either in fourth quarter 2023 or first quarter 2024. The abatement of headwinds that saw GDP flatline during 2023 should allow for some expansion in 2024. Nonetheless, the growth impulse is likely to remain muted and growth should underperform the United States. Therefore, despite comparatively subdued […]

April 2024