During 2023, inflationary pressures have eased from multi-decade highs but remain elevated at above-target levels. Central banks are committed to containing inflation and interest rates are likely to stay higher for longer. Against this backdrop, corporate private credit has the potential to provide an attractive risk/return profile.
We believe that Private Credit will continue to benefit in a world of high benchmark interest rates with its floating-rate yield profile, whilst our security position and strong lender protections aim to offer low volatility against a backdrop of an uncertain economic outlook.
We take a closer look at one of our recent transactions to illustrate how we approach deal selection and underwriting – the foundations of constructing a portfolio that provide investors with consistent cash returns and downside protection.