Fund managers and institutional allocators are making a “decisive move” into private credit, according to Bob Fraser, chief economist at alternative investment firm Aspen Funds.
He told Alternative Credit Investor that he is seeing capital “flowing to strategies that align with macro trends and offer real-world durability.”
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“One of the clearest shifts I’m seeing right now among fund managers and institutional allocators is a decisive move into private credit. With traditional lenders still sidelined and more than $1.5 trillion in commercial real estate debt maturing through 2027, private lenders are stepping in to fill the void,” he said.
“The dislocation is creating one of the most attractive environments for credit investors we’ve seen in over a decade.”
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He said that in many cases, managers are securing “double-digit yields with strong downside protection”, as in preferred positions, collateralised assets, and control provisions.
“For allocators seeking yield without equity risk, this is the moment. Investors are hungry for yield but they’re even hungrier for resilience.”
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