Investors Set to Increase Private Debt Allocations

More than 40% of the private equity investors surveyed in a new poll plan to increase their allocations to private debt over the next twelve months, and more than half believe the private debt market will grow over the next 12 months.

The survey was done by fund services provider Elian. The company surveyed 88 investors about their thoughts regarding the credit markets.

In addition to the high percentage expecting to increase allocations over the next year, 15% of the respondents said they were likely to boost exposure to private credit “significantly”, the company said in a statement. 29% said it would remain the same.

Only 7% of the survey’s participants believe the private debt market will shrink over the next 12 months. Increasingly popular as interest rates remain at rock-bottom levels for an extended period, investors are utilizing private credit as a diversification play with superior risk profiles versus traditional bond investments and the potential for equity-like returns.

“There has been a significant increase in demand for forms of alternative lending, specifically as institutional investors come up against continuing low yields from mainstream fixed interest vehicles,” said Charles Le Cornu, head of private equity at Elian, in the statement. “While private debt is still in its infancy as an asset class, this research clearly shows that investors are responding positively in their allocation levels.

Find the original article here:  http://www.finalternatives.com/node/33677?mc_cid=2dab630d69&mc_eid=ce09147388 

For more information about private debt investing or Old Hill Partners, please contact Chelsea Graves at cgraves@oldhill.com.