Once again, we will stick with our master theme this year of putting cash to work in a select list of alternative strategies that meaningfully increase income and total return without taking uncomfortable levels of risk.

Man, if you sat on too much cash this year instead of investing in a select list of alternative strategies, you must be kicking yourself. To be fair, if your binary choice only had been cash or bonds, you would feel pretty good, but fortunately investment choices are not that limited! So, let’s talk private credit.

Is private credit saturated with too much capital?

As promised in the last strategy note, we are going to zero in on the current opportunity set for private credit in relation to investor-perception-vs.-reality.

In at least one out of every three investor/client meetings I have with our august and robust distribution team (keep up the great work, folks), the question of whether or not private credit is saturated with too much capital inevitably comes up. The topic often enters the conversation because of recent financial press headlines about multiple investment firms that have raised multiple billions of dollars in private credit, or news of how widespread access is to private credit on wealth platforms with multiple asset manager/product choices.

To make a long story short, the quick answer to question #1 is no—private credit is not too saturated (but don’t worry, I know how to make a short story long, so we’ll delve into that in more detail in a minute).

The answer to question #2 is: Since when is access and choice a bad thing for a consumer in any product? Unless you’re a fan of denying your clients the same access and choice that mega institutions have enjoyed for decades, the democratization of alternatives should be celebrated, not suspiciously shunned.

Additionally, investor angst can be driven by the concept addressed in the last strategy note—that since the current opportunity seems too good to be true, there must be something wrong, right? As a reminder, sometimes things that seem too good to be true are indeed too good to be true and sometimes they are just factually true.

So away we go—let’s make that short story long