Episode 19 - Private Credit Fundamentals: Unveiling the Hidden Opportunity

24/06/2024 25 min Temporada 1 Episodio 19

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Síntesis del Episodio

Toreigh Stuart joined Garrington as a Senior Advisor in March 2021. His relationship with Garrington started through its primary capital provider, Next Edge Capital, where he had helped build out their Private Debt Fund. At Garrington, Toreigh is primarily responsible for sourcing, evaluating and executing investment opportunities, while serving in an oversight capacity on behalf of Next Edge. Toreigh is a member of all of the firm’s Investment Committees. 
Prior to joining Garrington, Toreigh has held a senior role as the Chief Executive Officer at each of Next Edge (2014-2021), Man Investments Canada Corp. (2006-2014) and BluMont Capital Corp. (2000-2006). In 2015, through the launch of the Next Edge Private Debt Fund, his principal responsibility had been to originate, manage risk and grow a portfolio of private loans on behalf of the Fund. 
Toreigh earned his Bachelor of Arts degree in Economics from the University of Toronto. He holds the CFA and CAIA designations. 
In this episode, Toreigh discusses private credit as an asset class and its growing momentum. The popularity of private credit has increased due to the tightening of bank financing and the need for alternative sources of capital. However, there are risks associated with investing in private credit, such as borrower default, asset value volatility, and fraud. To mitigate these risks, investors should focus on robust underwriting, ongoing portfolio management, and fluidity of capital.  
Throughout the episode, Toreigh address the fundamentals of the asset class, why now is the right time to invest and what’s the market opportunity. Additionally, Toreigh shares how Private Credit is opening up to the private wealth channel. There is a shift in the market, with more structures and products being developed to make private credit accessible to smaller investors.  
 
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Key Takeaways 

Private credit is an alternative asset class that offers better historical returns, cash flows, and preservation of capital compared to traditional lending. 

Private credit provides access to capital to businesses outside of the traditional banking network. 

Investing in private credit carries risks such as borrower default, asset value volatility, and fraud, which can be mitigated through robust underwriting, ongoing portfolio management, and fluidity of capital. 

Private credit is suitable for various types of investors, including high net worth individuals, family offices, and pension funds. 

Returns in private credit can range from 6% to 20% on an annualized basis, depending on the strategy and manager. 

There is a shift in the market, with more structures and products being developed to make private credit accessible to smaller investors. 


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