Taking the Measure of Credit Instruments

Taking the Measure of Credit Instruments

Hot topics for asset managers who invest in the credit markets

taking the measure

It is a good time to be a credit asset manager. Institutional investor interest in debt securities is rising, and the credit market continues its record of strong performance. In 2017, the private debt industry’s assets under management reached an all-time high of $638 billion, and the trend has continued into 2018. Returns exceeded 18 percent. (1) 

In recent years, many institutional investors have realized that traditional hedge fund strategies sometimes result in more beta than stakeholders are comfortable with. As a result, illiquid strategies—including investments in credit securities—are on the rise. 

According to one asset manager, credit markets today are loaded with great opportunities. Investors are looking for something different, but see that it’s hard to find alpha without a skilled manager with experience in the credit asset class.

Often used as a diversification play, credit instruments are also viewed as a kind of middle ground— a safer bet than riskier asset classes but with the opportunity to outperform equity markets over the long term.KPMG’s

Credit Instruments in Asset Management event, held May 2018 in New York, explored hot topics in credit investing, with KPMG leaders and industry experts sharing insights on the opportunities and challenges facing funds investing in this evolving asset class. We highlight key trends in the following to help asset managers succeed in credit investing.

(1) Private debt market grows to record size (AltFi, Feb. 7, 2018) 

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