In this edition Paul Nagy explores why corporate direct lending has emerged as one of the largest and most popular private credit strategies globally.
In our view as lenders, we are drawn to the asset class as we believe it represents a way to access private, company-level debt exposures with attractive yields, robust downside protections, and differentiated risk-return profiles compared to traditional fixed income. Yet “direct lending” is often used as a catch-all phrase and misconceptions about what it is, and what it is not, are common. In our opinion, understanding the distinction is critical for investors evaluating where private credit sits within a broader portfolio.
"True direct lending is about origination, negotiation, and relationship-driven financing, where skilled lenders can create high-conviction portfolios with strong downside protection - not just passively track credit beta through broadly syndicated deals.”