Industry voice: Aberdeen Standard Investments sets out why schemes should invest in private credit.
A changing landscape
The private credit landscape has expanded dramatically in the last ten years. Investors who are able to sacrifice liquidity can gain access to higher yields, an improved risk profile and exposure to less-correlated economic drivers. However, as the landscape continues to develop, building a diversified private credit portfolio by incrementally adding sector-specific sleeves is not only inefficient from a portfolio construction perspective, but also limits the opportunity set for all but the most sophisticated institutions. We argue for a new approach to investing in private credit.