Research Paper

Research Paper – Benefits of Private Debt to Investment Portfolios

Constructing a portfolio with the singular purpose of maximising returns is like choosing to invest in the bond with the highest yield. After all, there is a fundamental trade-off between risk and return – although asset classes such as equities may outperform during periods of sustained economic growth, they are also far more susceptible to periods of extreme downside volatility, as witnessed during the recent pandemic. As such, while diversification across asset classes may seemingly limit returns, this is often more than offset by the protection it provides during turbulent macroeconomic conditions. Historical research suggests that private debt is superior to alternative fixed-income securities, demonstrating higher returns and lower risk, and would serve as an invaluable addition to any portfolio…

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