Investors

Optimism has not been eroded in an asset class facing both scare stories and genuine challenges.

In this podcast, Arrow Global’s Zach Lewy explains how an uncertain geopolitical environment and the rise of AI are leading investors to engage more intentionally with European credit firms.

A recent note from the FCA highlighted both the rapid growth of the asset class and various areas of concern.

The firm also reported a high re-up rate for its latest flagship European credit vehicle.

State’s pension consultant Meketa recognises problems underlie default headlines, but notes private credit is ahead of public markets in working through the cycle.

Continuation vehicles backed by Pantheon will acquire a total of roughly $2bn of private credit investments.

The investor is also moving into other new areas of illiquid credit, including infrastructure and real estate financing, says founder and CEO Antoine Prudent.

Despite discussions of declining investor demand for liquidity, both funds saw requests for double-digit amounts of shares to be tendered

Apollo’s $9bn minority equity deal with gas company Oneok may well divert more attention to these kinds of arrangements.

Continuation vehicles present an interesting opportunity for fund finance, but concentration risk and a reluctant investor base pose a challenge.