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The risks and opportunities of private debt

Evan Gunter and Abby Latour
Evan Gunter and Abby Latour11/3/2021 03:26 PM GMT+08  • 5 min read
The risks and opportunities of private debt
An expansion of the investor base of private debt could lead to heightened risks if it leads to higher volatility.
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In a global economy increasingly fuelled by credit, the market for private debt has emerged as a new frontier for yield-hungry investors. The close bilateral relationships that are a feature of this market offer unique opportunities for both borrowers and lenders.

But the growing investor base and the broad distribution of private loans across lending platforms makes it difficult to assess the level of risk and — more importantly — who ultimately holds it.

The worldwide market for private debt — specifically direct lending — has grown tenfold in the past decade.

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