Private credit today is estimated to be every bit as large of an asset class as leveraged loans and high yield bonds. As the economy softens as traditional lending activity weakens, borrower migration to private credit is likely to grow. As a result, private credit is emerging as a key asset class for investors seeking attractive income and strong total return potential, as well as longer-term portfolio diversification1.
Within private credit, opportunities in direct lending serve as a unique and increasingly popular alternative to traditional bank lending. Matthew Harvey, Head of Direct Lending, PGIM Private Credit, shares his views on the case for direct lending, particularly in the middle market segment. Watch the video to explore the growing opportunities amidst shifting market dynamics, and read the Q&A to find out how to navigate the private credit landscape in both fallow and flush markets.
1.Diversification does not assure a profit or protect against loss in declining markets. The value of debt securities may be adversely impacted by the ability of the issuer to pay the amounts of interest and principal owed as they become due.
References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. The securities referenced may or may not be held in the portfolio at the time of publication and, if such securities are held, no representation is being made that such securities will continue to be held.
The views expressed herein are those of PGIM investment professionals at the time the comments were made, may not be reflective of their current opinions, and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. Neither PFI, its affiliates, nor their licensed sales professionals render tax or legal advice. Clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation. Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy.
Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
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