In our latest video insight, Laura Vaughan, Head of Direct Lending at Federated Hermes Limited, looks at the surge in demand for private credit in recent years and outlines where she believes the best opportunities lie for investors.
- An allocation to direct lending, focused on the right strategy, has the potential to provide an investor with low volatility, limited correlation to other asset classes, diversification to underlying industries, quarterly cash income and an element of inflation protection.
- The sharp rise in interest rates over the last two years has resulted in higher yields at a time when inflation has been rising, allowing the asset class to act as a potential inflation hedge to a certain degree.
- On top of a compelling return, the northern European lower mid-market senior secured segment can offer less downside risk and provides one of the best legal environments to negotiate any restructurings.
For further information on Federated Hermes' European Direct Lending capabilities, please click here.
For professional investors only. Capital at risk. The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other communications. This does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments.
