Driven by a combination of institutional investor interest and companies’ need to seek alternative funding, global private credit increased more than six-fold since the 2008/09 financial crisis, surpassing US$1.3 trillion in 2022, according to a new survey by Coalition Greenwich.
The survey, which polled 220 institutional investors in Europe, North America, Japan and the U.K., found 55 per cent of those in North America, Japan and the U.K. now invest in private credit, as do a third of those in Europe. Across all global respondents, more than one in 10 that don’t currently invest in private credit have plans to do so, despite changes in the macro environment.
“Despite those concerns, more than half of institutional investors that currently invest in private credit are sticking with plans to increase allocations to the asset class and over 40 per cent plan to expand their manager rosters in the next three years,” said Mark Buckley, head of investment management at Coalition Greenwich, in a press release.
In North America, institutional investors in private credit appeared to favour distressed and real estate debt, while direct lending and infrastructure were among the top picks for Europe and Japan. In Europe, nearly 70 per cent of all respondents also said they view environmental, social and governance as an important consideration when allocating private credit investments
“The next six months will provide some valuable perspective on the performance and resilience of what many institutional investors see as a new and less familiar asset class,” said Buckley.