Exploring the Rise of Alternative Credit

The chapter delves into the diverse subcategories of alternative credit, such as direct lending, consumer loans, real estate debt, and venture debt, emphasizing their distinct risk-return profiles and growth post the Global Financial Crisis. It discusses the increasing market size of private credit reaching $1.7 trillion, its attractive risk-return profiles compared to traditional fixed-income markets, and the challenges faced by pension plans in adapting to illiquid assets like private credit. The conversation also addresses the impact of rising interest rates on private credit borrowers and the potential benefits of long-term allocations to private markets despite liquidity concerns.