Pensions & Investments | Special Report: Fixed Income – Private credit strategies in stratosphere

By February 19, 2018In The News

Institutional investors splurged on private credit in 2017 to an unprecedented degree.

New commitments to private debt strategies topped $10 billion to reach a peak of $28.7 billion in the year ended Dec. 31, a 57% increase from the prior year.

Analysis of Pensions & Investments’ reported hiring activity by asset owners showed astronomical growth in new commitments to strategies investing in non-public securities that include direct lending, distressed/special situations, structured products, mezzanine debt, specialty leasing and financing, and multicredit strategies.…

…Sources said institutions are positioning their portfolios to take advantage of distressed investment opportunities likely to arise when the fixed-income cycle comes to an end.

“In 12 to 24 months, the cycle will end and institutional investors want to be invested in complex private credit instruments like (collateralized loan obligations) and bank loans,” said Trey Parker, partner, co-chief investment officer and portfolio at credit manager Highland Capital Management, Dallas…

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