1、THE BIG QUESTIONSPRIVATE CREDIT IN 2024 AND BEYONDP R I V AT E E Q U I T Y W I R EMAY 2024SUPPORTED BY:Its the talk of the town,and certain themes crop up in most conversations on private credit.First,the eye-watering risk return-ratios on offer:reports from The Business Times and the Lincoln Europe

2、an Leveraged Loan Index in February this year found the asset class to be outperforming buyouts and the broadly syndicated loan market respectively.Leading on from this is the widespread institutional interest in the asset class the most recent example being Australias second largest pension fund,Th

3、e Australian Retirement Trust,declaring plans to up their private credit allocations.GIC,CalPERS and a range of other major institutions have done the same in recent months.A more challenging topic to address is the risk of defaults data opacity in the private markets is making investors and regulat

4、ors nervous about the quality of loans being made,particularly in a high-speed,competitive lending environment.The EU tightened its oversight in February,while the SEC and the FCA are also reportedly mulling a stricter lending environment.Speaking of competition,another popular narrative in the medi

5、a is to pit banks against private credit providers as the former group looks to edge back into the deal landscape.A Bloomberg report from April cited Bank of America data to reveal$16bn in debt had already transitioned from private funds to the syndicated loan market in Q1 2024.And underpinning all

6、these narratives is ongoing interest rate speculation not a new phenomenon by any stretch,but particularly prolific in the current environment.This report takes a closer look at all these themes.Section one provides an overview of macro-level indicators:What happens if interest rates drop,or dont?Ca