Should Investors Worry About Private Credit

UBS maintains a neutral view on private credit, citing rising default rates in lower-middle-market segments and the need for investor selectivity. The firm suggests balancing private credit exposure with broader alternative strategies.

Key Takeaways

• 1.Private credit maintains a balanced risk-return outlook with rising risks in lower-middle-market segments.
• 2.Investors should adopt a selective approach focusing on senior, sponsor-backed, upper-middle-market loans.

Table of Contents

• Private credit investors have been worried about several recent developments.
• Late-cycle dynamics and an increasingly split market support a selective approach.
• Diversifying across alternative assets makes sense amid the current uncertainty.
• New this week
• One liner
• Did you know?
• Investment view
• Appendix
• Disclaimer

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