Private Credit: A Comprehensive Primer

Evolution of Private Credit

Private credit accelerated post‑GFC as banks reduced certain types of lending; investors sought yield and control through directly negotiated loans.

Deals are customized with collateral packages, borrowing bases, and covenants that surface risk early and preserve optionality.

Direct lending, unitranche, mezzanine/junior, and asset‑based finance; opportunistic and special situations during dislocations.

Returns come from floating base rates, spreads, and fees; key risks include liquidity, collateral volatility, and covenant discipline.

For many allocators, private credit complements public fixed income and private equity by adding current income with structural protections.