The View From Apollo
How Can Private IG Enhance Fixed Income Allocations?
Feb 14, 2025
Discover the intriguing world of Investment Grade Private Credit as the hosts differentiate it from public credit and unveil its expansive $40 trillion market. Explore the benefits and unique structures of asset-backed finance, alongside the shifting dynamics between banks and private credit underwriters. Uncover the advantages of private bonds that offer higher returns and engage in a fascinating discussion on the parallels between private investment and culinary creativity. The conversation also touches on the rapid advancements in AI and their impact on investing.
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Quick takeaways
- Investment-grade private credit, or Private IG, offers significant advantages in risk mitigation and flexibility compared to public investment-grade credit markets.
- The rise of non-bank lenders has reshaped the investment-grade private credit landscape, providing tailored financing solutions and enhancing competition among capital sources.
Deep dives
Defining Investment-Grade Private Credit
Investment-grade private credit, often referred to as private IG, is a broad and significant market that extends beyond traditional direct lending scenarios. It encompasses various forms of credit, including trade credit, consumer credit, and corporate loans, collectively amounting to an extensive $40 trillion market. This segment has long been overlooked, as private IG includes assets typically held on the balance sheets of banks and insurance companies, rather than solely focusing on the $1 to $2 trillion of middle-market direct lending frequently discussed. Recognizing the full scope of private IG presents substantial investment opportunities for those willing to explore this growing asset class.
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