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Private Credit’s Expansion: Critical Expertise Needed to Stay Competitive

Private Credit’s Expansion: Critical Expertise Needed to Stay Competitive

By Tom Jenkins
4th October, 2024

Private Credit’s Expansion: Critical Expertise Needed to Stay Competitive

Over the past two quarters, the private credit market has rapidly expanded beyond direct lending, now venturing into asset-backed financing structures. This shift, driven by higher interest rates and a slowdown in private equity deals, presents a unique opportunity for growth across various financial institutions, including insurance companies, asset managers, and even banks.

One example of the superior returns offered by private credit is Cliffwater’s CELFX, which delivered 13.17% annualised growth from its inception in July 2021 to August 2024. This has far outperformed public credit benchmarks. Current market data strongly points to investors allocating most, if not all, of their credit exposure to private solutions.

These changes are significant for hiring within this space. Firms will need talent who can not only tackle the complex nature of asset-backed lending transactions but also have the long-term strategic vision to take advantage of this opportunity. As differentiation through scale and technology becomes critical, demand for professionals skilled in origination, credit analysis, and portfolio management continues to rise.

It is a competitive landscape for firms operating in this market. As institutional investors seek higher returns with lower volatility compared to public credit, there is a real opportunity for professionals with expertise in the above areas to add real value for our clients. Please get in touch with me at [email protected] for a confidential discussion regarding your strategy for Q4 and beyond.