Welcome to Extreme Investor Network, where we provide you with unique insights and information to help you make the most of your investments. Today, we’re talking about the growing popularity of private credit as an alternative asset class.
According to Nuveen, private credit has been gaining traction among investors, with strong inflows and returns expected to continue. Saira Malik, Nuveen’s chief investment officer, believes that the private credit run is far from over. She notes that investor interest remains high, deal volumes are increasing, and M&A activity is expected to rise, creating a favorable environment for private credit transactions.
Lower interest rates are also expected to benefit businesses by improving debt service coverage ratios, making private credit deals more attractive. In fact, assets under management in private debt are forecasted to reach $2.64 trillion by 2029, up from $1.5 trillion in 2023, according to Preqin.
While private credit has traditionally been seen as an instrument for institutional investors, individual investors are increasingly entering the space. Ken Kencel, president and CEO of Churchill Asset Management, believes that the future of private credit is about the democratization of the asset class, with more focus on how to access capital from individual investors.
One way for individual investors to get exposure to private credit is through closed-end funds like the Blackstone Private Credit Fund (BCRED) and the Franklin BSP Private Credit Fund. These funds offer attractive annualized distribution yields and can provide diversification benefits to your portfolio.
For those looking for daily liquidity, exchange-traded BDC stocks like Ares Capital Corp, Blackstone Secured Lending Fund, and Blue Owl Capital Corporation may be a good option. However, it’s important to do your due diligence and focus on managers with a proven track record and solid team in place.
At Extreme Investor Network, we believe in the power of private credit as a valuable addition to any investor’s portfolio. By staying informed and making smart investment decisions, you can take advantage of the opportunities that this growing asset class has to offer. Join us on our journey to extreme investing success!