Institutional Investors to Increase Allocations to Private Debt and Structured Credit

Institutional investors are planning to boost their allocations to private debt and structured credit over the next 12 months, with nearly three-quarters of those surveyed looking to increase their exposure to these asset classes. According to research by credit-focused investment firm Aeon Investments, about 24% of investors intend to significantly increase their allocation to private debt, while 50% plan to make slight increases. Among the key drivers for this shift are an improved regulatory environment, more investment choices, and attractive yields offering appealing risk-adjusted returns.

A similar trend was observed in structured credit, with 22% of respondents aiming to make substantial increases in their investments, while 49% plan to slightly increase their exposure. Only 3% of those surveyed intend to decrease their investments in these asset classes. The research, based on responses from 101 senior investment managers across Europe, the Middle East, and the US, also indicated that 94% of respondents view credit as an attractive investment proposition in the current economic climate, thanks to its potential for delivering strong returns when equity markets are under pressure.

Evgeny van der Geest, Head of Capital Markets Strategies at Aeon Investments, highlighted that the survey underscores investors' recognition of the many advantages of structured credit and private debt markets, especially in the context of challenging economic conditions. He noted that fixed income plays a crucial role in helping investors achieve attractive risk-adjusted returns while aligning with sustainable investment objectives.

By fLEXI tEAM