The direct lending asset class and investment opportunity was born out of regulatory changes to bridge the gaps in the financial market. Expanding from US$400bn to over US$1.5tn in 2024, direct lending has become the fastest-growing segment within private credit. Direct lending provides investors the opportunity for premium yields that are often unavailable in the public credit markets. Direct lenders can capture alpha and mitigate downside risk through rigorous diligence process, negotiated terms and pricing, tighter protective covenants, and robust portfolio management. In an era of tight credit spreads, direct lending offers investors high, consistent income and a diversified income stream. Strategically allocating to direct lending can deliver premium yields, enhanced returns, and reduced volatility for investors’ portfolios.

Nicole Drapkin | 0.75 CE