MSCI sees private credit demand holding up as VC, PE struggle for exits
Distributions from private credit funds are showing more resilience than private equity, attracting investors despite ongoing concerns around asset quality
Private credit market experts have expressed confidence in continued demand for the burgeoning asset class despite growing regulatory scrutiny and asset quality concerns, as buyout and venture capital funds face a slower pace of exits and tougher fundraising conditions.
MSCI, which has a global data base on private credit, said the typical distribution profile for private equity and venture capital funds has been pushed out by several years, making the more regular distributions offered by private credit more appealing.
“With private equity, what we've seen in recent years is that distributions from private equity have really dried up, and that can cause problems, even for institutional investors,” MSCI chief research officer Ashley Lester told Capital Brief.
“If you thought you were signing up for, say, a 10 year investment, and actually, all of a sudden, you find you're signing up for a 14, 15, 16 year investment, that can really cause significant problems with liquidity.”
