Stable returns without daily market volatility?

That is why private debt is increasingly finding its place in the strategic portfolios of our clients, says Bas Snelders from Affluent.

Private debt means: providing loans directly, outside of the stock exchange.

Especially in a time when bonds no longer always fulfil the stabilising role they once had, more and more investors are looking at alternatives within the fixed income space.

Within private debt, we at Affluent deliberately choose for:

• Loans secured by real estate collateral 

• First mortgage right · Professional parties with a proven track record

• Experienced borrowers who provide personal guarantees

• Healthy loan-to-value ratios to ensure sufficient buffer in adverse conditions

• Average interest of approximately 6%-9%

• Low correlation with public markets

So no daily price fluctuations, but contractually fixed interest agreements with clear securities. Particularly for medium-term capital (3 to 8 years), this is a stable pillar alongside bonds (short, 0-3 years) and equities/private equity (long, > 8 years).

Of course: liquidity is more limited and credit risk remains. That is precisely why strict selection is essential. A wide range of private debt solutions is now available.

For more information, please contact Affluent.

Sources: Affluent, Bas Snelders, Joost Willekes, Daiana Parkhouse