The global private credit market has expanded dramatically over the past decade, now surpassing US $2 trillion in assets under management, according to the International Monetary Fund. Pension funds and other institutional investors continue to increase allocations, motivated by attractive yield premiums of 200–400 bp relative to comparable public credit instruments. However, this expansion coincides with mounting vulnerabilities: structural illiquidity, weakening underwriting discipline, and increasing exposure to macroeconomic stress. Without robust governance and enhanced stress testing, private credit may pose hidden risks. This paper explores some core risk dimensions: liquidity, underwriting quality, market competition, macro dynamics and manager conflicts, and concludes with practical recommendations for institutional investors.
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Genivent Partners: Our multi-asset vertical opportunistically invests in Omnigence partners funds’ secondaries and GP holdings. Genivent acts as a dedicated liquidity sleeve for investors seeking intra-hold period liquidity.
Veripath Partners: Our Canadian farmland investment fund focuses on non-operated row crop farmland with productivity pricing discounts, positive productivity trends and low productivity volatility. Veripath provides consistent returns with infrequent drawdowns, low return volatility and can be an effective public equity replacement in traditional portfolios.
Arvore Partners: Our private equity vertical invests in the lower market where cashflow can be acquired at compelling multiples, then serially consolidated in selected verticals to drive exits. Arvore provides monthly distributions and recurring equity optionality within an evergreen offering.