We Study Billionaires - The Investor’s Podcast Network TIP588: Lucrative Opportunities in Private Credit w/ Nelson Chu
Nov 19, 2023
Nelson Chu, Founder and CEO of Percent, is a serial entrepreneur reshaping the private credit landscape. He shares insights on the decline of the traditional 60/40 portfolio and the growing appeal of private credit as an alternative investment. The discussion dives into how private credit deals are structured, current interest rates, and default rates in the market. Nelson highlights how Percent is bridging the gap in investor demand and offers tips for diversifying within this burgeoning asset class.
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Percent's Underwriting Shift
- Percent stopped most direct underwriting and now relies on established underwriters like credit funds.
- This lets investors participate alongside experienced firms while funds redeploy capital.
Diversification in Private Credit
- Diversification is crucial in private credit due to its illiquidity and opacity.
- Percent offers blended products and algorithmic allocation for easier, diversified investments.
Institutional Interest in Private Credit
- Family offices and advisors are increasingly interested in private credit, seeking uncorrelated alpha.
- They desire greater transparency and access to this historically opaque market.