Private Credit Insights: Liquid Courage | Voya Investment Management
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Private Credit Insights: Liquid Courage

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Chris Lyons

Chris Lyons, CFA

Head of Private Fixed Income and Alternatives

Justin Stach

Justin Stach

Senior Vice President, Head of Private Credit

Oil paint ocean waves water

Policy uncertainty, federal funding cuts, and volatile markets have spurred many investment boards to fixate on liquidity. Take courage: You can sell out of private credit positions—and not just to secondaries funds.

Key takeaways

  • The investment grade private placement market has always had more liquidity than everyone thinks, though some areas are more liquid than others.
  • Sticking with intermediated deals and a Tier One manager can help you sell out of single names more easily—and potentially get you a higher average premium on primary placements.
  • You can also ladder your portfolio with shorter-duration asset-based finance (ABF) paper, which can return money faster while potentially keeping spreads high.
  • Energy infrastructure debt is also returning cash very frequently thanks to America’s desperate need for more electricity generation; it is probably the strongest macro play in direct lending right now.

A note about risk 

All investing involves risks of fluctuating prices and uncertainties of rates of return and yield. All security transactions involve substantial risk of loss. 

Private credit: Foreign investing does pose special risks, including currency fluctuation, economic, and political risks not found in investments that are solely domestic. As interest rates rise, bond prices may fall, reducing the value of the share price. Debt securities with longer durations tend to be more sensitive to interest rate changes. High yield securities, or “junk bonds,” are rated lower than investment grade bonds because there is a greater possibility that the issuer may be unable to make interest and principal payments on those securities. Other risks of private credit include, but are not limited to: credit risks, other investment companies risks, price volatility risks, inability to sell securities risks, and securities lending risks.

Related Strategies

Private Credit Investment Grade

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Investment Insights Private Credit REID Insurance

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