Should HNIs look at private credit as an investment option? 6 experts answer
Sundaram Alternates, mentions that India is moving in the direction of North American markets where alternate credit is 75-80% of all risk financing versus exactly the opposite in India. “Proof of the pudding as far as private credit is that the AIF Cat II industry has grown from zero in 2013-14 to ₹6 lakh crores today! The AIF industry as a whole is approx.
20% of the MF industry in such a short span of time," he said. Anuj Kapoor, MD & CEO, Private Wealth and Alternatives Asset Management, JM Financial said that investment in private credit in India is estimated around USD 15 billion at the end of FY22 and continues to grow rapidly.
Also Read: Three Private Credit Funds Get Moody’s Warning on Problem Loans Investors have increasingly added private credit to their portfolios as a potentially higher-yielding alternative to traditional fixed-income strategies.
Tailored solutions: “Private credit is a significant asset class for investment portfolios, offering several key benefits that enhance and diversify financial strategies. Unlike public market assets, private credit allows for tailored solutions that can specifically meet investors' individual needs and preferences," said Prashant Mishra, Founder & CEO, Agnam Advisors. Anuj added that the variety of private credit strategies, each with their unique proposition, means that a private credit portfolio can be structured to target a wide range of objectives and can be tailored to an investor’s individualised goals.
Yield enhancement: Private credit often offers higher yields compared to more traditional investments like public bonds or bank deposits. This is partly due to the illiquidity premium associated with private lending, as these loans are not as easily sold or
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