Making Markets Phil Huber: The Case for Private Credit - [Making Markets, EP.36]
Jul 5, 2024
Guest Phil Huber, Head of Portfolio Solutions at Cliffwater, discusses the booming private credit market, covering topics like downside protection, due diligence, demand, and volatility. He also shares insights on his career journey and role at Cliffwater.
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Episode notes
Use Semi‑Liquid Vehicles For Distribution
- Expect demand from both institutions and wealth channels, not just a reallocation from institutions to RIAs.
- Use semi‑liquid vehicles like interval funds and private BDCs to access private credit within advisor portfolios.
Spreads Tell The Real Story
- Media alarmism drives doom‑and‑gloom headlines, but spread levels are the true supply‑demand arbiter.
- Private credit spreads remain within historical ranges, implying no extreme overheating or panic.
Treat Private Debt As Strategic Core
- Use long time‑series proxies like the Cliffwater Direct Lending Index to gauge historical drawdowns and recovery patterns.
- Treat private debt as a strategic, long‑term core allocation and avoid market timing attempts.