The Risks and Opportunities of Private Debt
Direct lending is attracting attention from both private and institutional investors thanks to its steady performance and appealing returns. But the overall size and composition of this market is already difficult to assess, and the addition of new players could make it even harder to track the level of risk for both lenders and borrowers.
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NEW YORK – In a global economy increasingly fueled by credit, the market for private debt has emerged as a new frontier for yield-hungry investors. The close bilateral relationships that are a feature of this market offer unique opportunities for both borrowers and lenders. But the growing investor base and the broad distribution of private loans across lending platforms makes it difficult to assess the level of risk and – more importantly – who ultimately holds it.