The Fund invests in a diversified portfolio of senior secured loans, among other private credit opportunities.
Senior secured loans have historically provided a natural and effective hedge against inflation and rising interest rates due to the floating-rate coupon. Recent market uncertainty has led to spread widening, providing a compelling environment to deploy capital into private credit.
We believe the strong tailwinds that currently exist for private credit due to the significant amount of "dry powder", or cash reserves held by companies for investments, that remains within private equity funds, may provide for a sustained private credit opportunity environment for the foreseeable future.
"The demand for private credit continues to grow, as there has been decreased participation by banks in the leveraged loan market. We believe this growing, $1 trillion asset class represents a significant opportunity for our investors."
Kevin O'Donnell, Executive Managing Director | Cresset Partners
The Fund's strategy is focused on direct lending—the predominant asset class in the private credit universe. Direct lending includes any debt held by—or extended to—privately held companies, and it most commonly involves non-bank institutions making loans to private companies. The private company is obligated to pay back the full sum of the loan, plus interest, to the lending institution. Direct loans are senior in the capital stack4 or the structure of all capital that is invested into a company, secured by collateral, and offer floating interest rates.
Sources and structures each transaction, dealing directly with the borrower.
Relies upon the lender to support ongoing growth initiatives.
The borrower is obligated to pay back the full loan principal, with interest, in accordance with deal terms. Direct lending is attractive to some investors due to its potential for returns.