There's a lot to like about private credit these days, according to Nuveen. The alternative assets have become increasingly popular among investors and Nuveen expects inflows and strong returns to continue. "The private credit run isn't over yet," Saira Malik, the asset manager's chief investment officer and head of equities and fixed income, wrote in a recent report.
"Investor interest remains high, demand is strong, deal volume continues to rise and we expect M & A activity to increase, which should act as a continued tailwind," she added. "We also think some private credit transactions should be able to increase leverage ratios as interest rates decline, which could make these deals more compelling." Lower interest rates should also improve the debt service coverage ratios of businesses, Malik noted.
The assets under management in private debt is forecast to reach $2.64 trillion by 2029, up from the $1.5 trillion in 2023, according to Preqin .
Returns are expected to rise further, the firm said. How to invest While private credit is largely seen as an instrument for institutional investors, individual investors have also been moving into the space. "If you look back over the last 10 years, the story's really been institutional," said Ken Kencel, president and CEO of Churchill Asset Management, the private capital business for Nuveen.
"Over the next 10 years, I think the story is going to be much more about the democratization of private credit." As more individual investor.
