Canadian pension funds ramping up private credit amid high inflation, high interest rates

Andrew Krei, co-CIO of Barrett Upton Capital Partners, an alternative investment firm, said one of the clear benefits of private credit has been the potential for higher returns.

“Over the last decade, private credit has provided a material yield advantage over most fixed-income asset classes, including 3%-4% over syndicated high yield and leveraged loans,” he said. “Because the assets aren’t marked daily, the returns are even more attractive when viewed through a risk-adjusted lens. At the same time, defaults across the asset class have been relatively benign, and lower than high-yield instruments.”

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