When interest rates rise, the economic news is uncertain and there’s still a major European land war going on, investors need to position for different outcomes. In that setting, an “all-weather” approach to the credit markets appears a wise course.

And that stance is one that a new fund from Cresset, the US wealth management firm, is taking. The firm launched its Cresset Partners Private Credit Fund LLC a few weeks ago. Clients, such as family offices, wanted this offering, Kevin O’Donnell, executive managing director at Cresset Partners, told Family Wealth Report.

“The most important component of investing in private credit is getting scale to reduce fees and achieve efficient implementation through a diversified portfolio of high-quality private loans,” he said. “We invest in scale and with the economies that you’d associate with a sovereign wealth fund, pension fund or insurance company.”

O’Donnell argues that senior secured loans provide a natural and effective hedge against inflation and rising interest rates because of the floating-rate coupon that is typically associated with private loans.

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