Private credit has grown rapidly over the past decade, attracting investors seeking higher yields and diversification. But as more retail investors gain access to private markets, are the potential returns worth the risks?
In this episode of FT Adviser's Margin Notes, editor Simoney Kyriakou speaks to Aaron Hussein, global market strategist at JPMorgan Asset Management, about the opportunities and challenges of investing in private credit and direct lending.
They examine how private credit differs from traditional fixed income, why the market has expanded so quickly and what financial advisers should consider before recommending it to clients.
The discussion explores default rates, liquidity constraints, loan valuations and the impact of interest rates on investment returns. They also consider the role of private credit in diversified portfolios, the growing interest from pension funds and whether the asset class can offer protection against inflation.
With private credit becoming increasingly accessible to retail investors, what are the risks advisers and their clients need to understand?
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