To limit their exposure to risk, Priest advised investors not to devote the entire fixed income category of their portfolios to private debt. Beyond that, he said investors should do their homework and make sure they are dealing with companies with strong leadership.
“Private markets in general can be somewhat inefficient, so strong management is a big differentiator,” he said.
With investors and advisers inclined to ask more questions, it’s safe to say that private debt managers have their work cut out for them. But for managers like Ontario-based Cortland Credit, which focuses on lending to small and medium-sized businesses in the Canadian, US and European spaces, providing answers and reassurance is business as usual.
“In the world of private debt, potential investors and portfolio management teams want and should receive detailed information about a manager,” Sean Rogister, CEO of Cortland Credit Group Inc., told WP. review principals’ backgrounds, signing authorities, segregation of duties within the company, who makes decisions and other information. “
With over three decades of direct lending expertise – including Rogister, Bruce Sherk (co-founders of Cortland Credit) and several members of the executive team – the company is accustomed to answering questions and providing comprehensive documentation. to institutional investors regarding its management and the quality of its portfolio.