2024 Private credit investor sentiment
We are very pleased to share our 2024 Private Credit Investor Sentiment, which provides insight into the views of investors in the market.
Our broad survey posed questions about allocations, strategy preferences, and market concerns - among other things - and we're now pleased to present the key conclusions from an asset class that continues to grow, mature, and form a fundamental part of most institutional investors' portfolios in today's market.
The outcome? A reinforcement of the increasing influence and sought-after nature of private credit - an overwhelming majority (96%) are maintaining or increasing exposure to the market, and almost three quarters (74%) are looking beyond traditional strategies to generate returns. We also discovered concerns around AUM growth and fund-level leverage when investors were asked to detail potential worries across the next five years.
Key findings include:
Allocations to maintain or increase
Almost all of investors polled (96%) expect to increase or maintain their private credit allocation in the next twelve months.
Fewer managers, more of the action
60% of LPs surveyed expect to allocate to 10 or fewer fund managers.
Direct lending has its day
Investors’ most favored strategy remains senior, corporate direct lending, which has now become a “core” component of most private credit portfolios.
Investing in secondaries yet to take off
66% of respondents are yet to venture into this space, with no exposure to the private credit secondaries market.
GP AUM growth a concern
82% of respondents agreed that AUM growth may lead to a deterioration in credit standards.
Traditional drawdown structures still the clear favored structure
53% of respondents prefer closed-ended, commingled draw-down funds with Private BDCs the least preferred.