Uncertainty in market expectations presents a conundrum for institutional investors. Prospects of near-term volatility are baked into allocations, while doubts surrounding market conditions, inflation, Russia-Ukraine conflict, and wider macro-outlook create a need to limit potential downside risk while taking advantage of dynamic asset allocations. 

In an environment where future return expectations for most asset classes are lower than returns in recent years, the private debt space presents investors with the potential to diversify exposures while leaning into areas expected to benefit from volatility. However, with default rates anticipated to rise, it is more important than ever to construct portfolios appropriately, limiting concentration risk, and ensuring investment strategies can be accessed and leveraged to meet long-term investment needs. 

For investors eyeing the $1.2 trillion asset class, the ability to sculpt strategies around risk, ESG and geographies present an opportunity to deliver on investment goals. 

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