Private credit “in between” bull and bear phase

Private credit is “in between” a bull and a bear cycle, says Sam Boughton, head of EMEA and director of Moonfare UK.

Boughton said that over the past 18 months the investment platform has seen increased demand for private credit, “especially if people thought that they could take some risk off the table, but not necessarily massively compromise on their returns.”

This demand started to take off in the second half of 2022, when the rising interest rate environment saw investors turn to products such as secondaries, infrastructure and private credit.

Read more: Private debt fundraising starts to recover

“One of the things that we see from a Moonfare perspective is that our investor demand really does change, dependent on market cycle and depending on what people read and where interest rates are,” said Boughton.

“Right now, we’re in that in between phase where interest rates have started to come back down and inflation seems like it’s more under control. People are still not fully risk-on, but at the same time, they are thinking a little bit more defensively and being slightly more adventurous.”

The Moonfare platform offers access to multiple private market funds with minimum investment thresholds of $75,000 (£57,482). Boughton said the platform works with around 20 to 30 funds per year, with a focus on private market strategies such as buyout growth, VC infrastructure, and private credit, including direct deal opportunities.

Read more: BlackRock: Fed cuts signal market “recalibration”

“The original purpose of Moonfare was to provide broader access to private markets to a group of investors that we thought were underserved by private markets,” said Boughton.

“We will continue to look at private credit funds in response to our investors, and especially in response to investors who are building that portfolio and see private credit as a way of bringing a bit of risk diversification and J curve mitigation.”

Boughton added that the firm plans to launch more products in the direct deal space in response to investor demand.

Read more: Private debt AUM to hit $2.64tn by 2029