Private credit soars 77% as asset class continues to heat up
The risk of being out of touch and out of time…
One of my first thoughts as I was reading through the recent article in “Pension & Investments” regarding private credit was, “does the timing make sense now?”
My second thought bizarrely went to the 1984 hit song Out of Touch by Hall and Oates (more on that to follow). The article highlights the increased capital allocation amongst the country’s largest pension plans to “private credit” (contrasted with public credit aka bonds). This recent trend was and is likely the result of institutional investment professionals needing to generate acceptable risk adjusted results to achieve their target return objectives after a period of historically low interest rates.
Pension plans, like most long term investors, need to make allocation decisions today based on current market conditions that will likely impact their achieving future return objectives.
The risk of not doing so might cause them to look out of touch and leave them out of time(my apologies to pop music duo Daryl Hall and John Oates for my lyrical adaptation).
At Conexus Capital Management, LLC it appears as though the timing is right to consider and investigate an allocation to this growing asset class as well.