Park Square Perspectives: Credit is an “Asset-Pickers” Market

Private credit has seen tremendous growth over the last decade, with many sophisticated institutional investors now allocating a significant portion of their portfolio to the asset class. While investors view the return profile as attractive, they are becoming more sanguine about the risks and more discerning as the asset class matures. They see many managers who lack long-term track records, appear to prioritise gathering assets over disciplined investing and who are beginning to encounter problems in their portfolios.

Moreover, in a broader investment world where passive investing is all the rage, academics have questioned whether private credit consistently generates alpha. In our view, the asset class provides excellent opportunities to generate alpha and the observable benchmark is clear.

Volume 4 of Park Square Capital’s Perspectives looks at the drivers of performance in credit, where you succeed by avoiding the losers rather than backing the winners.