In Summary
Private credit was unequivocally among the most notable beneficiaries during what we refer to as “The Great Rate Reset” over the past two years: the retreat of traditional lenders resulted in a material leakage of lending activities from the banking system to direct lenders. As the Fed gradually moves towards more accommodative monetary policies, we see opportunity sets narrowing for private credit.
Looking forward, we maintain our favorable view for the asset class, which continues to play an important role in portfolios for 2024, albeit in an evolving capacity.