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Part III: Investment Strategies and Specialist Markets

Chapter 15

Private Credit and Direct Lending

Private credit supplies negotiated financing outside a conventional public bond issue or broadly syndicated loan process. Borrowers may value certainty, confidentiality, speed, or a customized structure. Lenders seek income and repayment supported by the business, its assets, and contractual protections.

The lender's upside is usually more limited than an equity owner's. A performing loan produces agreed payments rather than unlimited participation in enterprise growth. Credit underwriting therefore places particular weight on avoiding losses and understanding recovery when repayment fails.

The preview ends here. The full chapter is in the book.

In this chapter

  1. 15.1Cash income and total yield
  2. 15.2Monitoring the borrower
  3. 15.3Fund-level risks