Institutional investors sticking with plans to increase private credit exposure

Written by Adam Cadle

15/02/2023

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% plan to expand their manager rosters in the next three years, new research published by Coalition Greenwich has shown.

The research, The State of Play in Institutional Investors’ Use of Private Credit, presented views from 220 institutions across North America, Europe and Japan, and found that around 55% of institutional investors in North America, the UK and Japan now invest in private credit, as do a third of those in continental Europe.

Around the world, more than 1 in 10 non-users have plans to start investing in private credit, despite changes in the macro environment.

In North America, institutional investors in private credit favour distressed and real estate debt, while direct lending and infrastructure are among the top picks for Europe and Japan. In Europe, nearly 70% of institutional investors also view ESG 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,” Coalition Greenwich head of investment management Mark Buckley stated.

Coalition Greenwich’s research was conducted between September and November 2022.

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