Public and Private Debt: Compelling Complements for Investors
As investors seek returns in a low interest rate world, many find themselves trying to determine how best to allocate to credit to maximise yield and manage risk in a cost-efficient framework. We believe this can be achieved by concurrently accessing a broad and growing opportunity set in both the liquid credit and traditional middle markets. In this report, we will discuss why we believe a convergence of these markets is creating an attractive investment opportunity for managers positioned to exploit this dynamic to potentially benefit investors, specifically by leveraging differentiated intelligence and sourcing to achieve preferential deal flow and economics. In addition, we will address how liquid credit and corporate direct lending are complementary strategies that in our view, when paired, present a compelling risk-adjusted return opportunity relative to traditional fixed income across market environments.