Private Credit in Practice: Where Private Credit Fits in Client Portfolios Today – Barings – 9.28.26

Summary:

Private credit has become an increasingly important consideration for investors seeking income, diversification, and risk-adjusted return potential beyond traditional fixed income markets. Typically positioned between public bonds and equity on the risk-return spectrum, direct lending offers exposure to senior secured, predominantly floating-rate loans that can provide attractive income and downside protection characteristics.

In this session, we’ll examine where direct lending fits within broader asset allocation decisions, how it differs from traditional fixed income, and the key characteristics advisors should understand when assessing the opportunity set.

Topics will include:

• How direct lending can complement traditional fixed income allocations
• The impact of floating-rate structures, senior secured lending, and first-lien positioning on risk-return profiles
• The role of financial maintenance covenants and manager underwriting in navigating changing market conditions
• How advisors and their clients can access private credit through fund structures including BDCs

Advisors will leave with a framework for assessing direct lending opportunities, comparing available structures to public credit alternatives, and determining how the asset class may complement diversified client portfolios.

Accepted for 1 CFP / IWI / CFA CE Credit

Speaker:

Thomas McDonnell serves as the Chief Executive Officer of Barings BDC (NYSE: BBDC), Co-Chief Executive Officer of Barings Private Credit Corporation, and Co-Chief Executive Officer of Barings Capital Investment Corporation. He is also a board member for Rocade LLC, a specialty finance company focused on litigation finance.

Thomas previously spent nearly two decades at Barings, where he served as a Managing Director and a member of the U.S. High Yield Investment Committee and other credit related investment committees. During his tenure, he played a key role in managing multi-strategy and global loan portfolios, navigating complex credit environments across multiple market cycles and spearheading fundraising efforts exceeding $15 billion.

Earlier in his career, Thomas held roles at Patriarch Partners, Bank of America and JP Morgan Chase, where he focused on deal structuring, credit risk management, portfolio strategy and financial planning.

Thomas is a graduate of State University of New York at Buffalo where he obtained a B.S. degree in Business Management and a Master of Business Administration (MBA) Accounting degree and a retired Certified Public Accountant.