There has been a lot of debate about private credit over the past year.
Proponents will contend that these investments can generate above-average fixed-income returns over the long run
However, detractors have argued that the sector poses systemic risk to the global economy and could result in significant capital losses for investors. Here’s a closer look at what investors should know about the private credit debate. What is private credit?
The private credit market has risen in prominence over the past decade for two reasons. The capital needs of industry have grown as the economy has expanded. However, traditional lenders such as banks and credit unions have retrenched due to increased regulation and more burdensome capital requirements.