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Private credit outperforming investor expectations, says Preqin

Global investors are increasingly targeting private allocations across portfolios to hedge against ongoing uncertainty, according to a new report by Preqin, with almost half (45%) planning to increase their capital allocations to private credit over the next year.

Preqin’s Investor Outlook: Alternative Assets, H2 2023 report presents the responses from investors across the globe, surveying 178 institutional investors.

Private debt is the asset class which has most outperformed investor expectations, according to the report, with 90% of those surveyed reporting that the asset class had met or exceeded expectations over the past year. This trend is expected to continue, with respondents having the highest conviction about continued strong performance of private debt versus all other asset classes.

Over half of investors surveyed (53%) predict that private debt will perform even better over the next 12 months.

Much of the interest in private debt is due to the current economic environment and concerns around interest rates lingering, with almost two thirds of all survey respondents (61%) pointing to reliable income as the main reason for investing in private debt, compared to only 19% who cite high absolute returns as the primary factor for investing.

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