Gareth Henry’s recent interview with Clara Davis resulted in an article on the Daily Forex Report discussing the benefits and risks of private credit. The article titled, “An Overview of Private Credit with Gareth Henry” reveals the latest investment opportunity of private credit. Gareth Henry became an expert in alternative investments after he completed his degree in actuarial mathematics from the University of Edinburgh in Scotland. He has worked for Fortress Investment Group since 2007, where he became the managing director of the company. He is also focused on helping the company expand with his marketing towards the United States as well as the Middle East and Europe. Some of his responsibilities include making sure the pension funds of the company are well invested. He also focuses on finding and maintaining insurance relations in different companies. He recently became responsible for raising capital between Fortress Investment Group and other companies when he became the Global Head of Investor Relations.
Gareth Henry’s latest obsession in alternative investment opportunities is private credit funds. However, he does recognize that this kind of investment has some risk. Though private credit has the potential for returns that are higher than the market in general, there are many different risk factors that should be considered. Some of the standard risks are those that are found with any hybrid equity investment. However, there are also some risks that are unique to private credit that need to be analyzed by anyone looking to invest in this alternative investment opportunity. One risk is leverage.
Though many managers of private credit will use leverage to make their returns greater, it will also increase the risk that the returns will be lower than average. This is particular to senior debt funds because this kind of subordinated debt is too risky for most lenders. Though lenders can greatly increase their returns with this kind of offer, they are generally leveraged positions. This can cause credit lines to be canceled during a recession or crisis in the economy. If the credit lines are canceled, it will cause the returns to go down.
Source of the article : https://medium.com/@garethhenry