Can you start by defining capital solutions, and how the opportunity set differs from distressed debt?

We think of capital solutions as flexible, often credit-focused strategies that offer investors access to unique dealflow and give sponsors and borrowers access to customised or bespoke financing solutions. These strategies typically target a return profile between traditional, sponsor-backed direct lending and private equity. However, the way managers target that return profile can vary significantly.

While some capital solutions strategies focus primarily on junior capital investments, we tend not to venture into that risk spectrum. Rather, we focus on driving returns through investments in senior secured debt, which makes up roughly three-quarters of our portfolio. In our view, this not only positions us to potentially achieve the attractive returns characteristic of this asset class, but also provides investors with greater downside protection and resilience through economic cycles.

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