Special Report: How Private Credit, Subject of Scary Forecasts, Came Out a Winner
Institutional investors like Arizona’s pension plan have done pretty well with this newly popular asset class.
Forsaken by major commercial banks after the 2008-09 financial crisis, small businesses turned to private lenders for financing. Qualms were rife that this non-bank lending, which unlike traditional bankers enjoys no federal backstop, would founder in the next downturn.
That didn’t happen to the asset class. And plenty of institutional investors that have since added private debt to their portfolios are reaping the rewards. Not blowout, Tesla-style gains, certainly, but solid, mid-single digits in a low-interest time, with some hitting the low teens.