Churchill’s Gornick On Private Debt Trends and Demand Drivers

Alona Tolentino Gornick, Managing Director, Senior Investment Strategist, Churchill Asset Management joined Keith Black, Managing Director, RIA Channel to discuss the growing private debt asset class, investor trends and demand drivers.

Private debt has experienced rapid growth over the last 10-15 years. Relative to public fixed income markets, the asset class has generally provided steady income, attractive risk-adjusted returns, and stability. With increased demand from both investors and borrowers, the roughly $1.4T invested in private debt today is projected to 5x over the next decade. 

Rising volatility and economic uncertainty in the public markets, has contributed to increased allocation to alternatives, broadly. Recent 60/40 portfolio challenges, coupled with innovation in product structures has opened up private market access to a whole new group of investors and their advisors.

On the investment side, recent financial sector volatility has delivered opportunity for non-bank lenders to deploy more capital. Today’s private lenders are remaining open and supportive, but with increased selectivity, explains Gornick pointing to Churchill’s focus on high quality borrowers with recession-resilient operating models. Due to higher base rates and wider spreads for senior secured debt, 2023 is shaping up to be a compelling vintage year, says Gornick. While recession risk, rising rates and inflation pressures will likely translate into higher default rates, diversification and manager selection is key to outperformance.

Churchill Asset Management is the exclusive manager of private capital for Nuveen and currently manages over $46 billion in committed capital. Specializing in private middle-market companies owned or controlled by private equity firms, Churchill touts deep relationships in the private equity community, which ultimately drives deal flow, investment activity, and scale.



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