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A Crescendo in Private Credit?

Returns that seem too good to be true

Nicolas Rabener
10 min read
16 Oct 2023

SUMMARY

  • The AUM in private credit funds is expected to double to $2.7 trillion
  • However, the performance of the industry’s benchmark index can be challenged
  • The returns of private credit funds seem smoothened compared to public funds

INTRODUCTION

Some asset classes are currently more sexy than others. Most real estate assets have not recovered from the COVID-19 crisis and are now being hit by rising interest rates. Same for venture capital, where valuations crashed in 2022. Private equity is still popular with investors, primarily as these funds have not started marking down the value of their investments aggressively, hoping for these to recover and everything to smoothen out (read Private Equity: Fooling Some People All the Time?).

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