Credit Forum 2025

Eidetic memory is the foundation of an elephant’s wisdom—an ability to recall vital information about terrain, water sources, and past dangers.

Credit investing, too, requires an eidetic approach: a deep understanding of market cycles, risk patterns, and the evolving financial landscape.

History has shown that financial crises are often credit-related—whether it be the subprime mortgage crisis of 2008 or corporate debt defaults in times of economic stress. Those who fail to remember these lessons risk repeating the mistakes of the past.

Credit Portfolio Construction

Credit investing mirrors the elephant’s intelligence and adaptability. Just as elephants navigate varied terrain, investors in corporate and structured credit must assess risk and reward across changing market conditions.

The choice between investment-grade bonds and high-yield debt mirrors an elephant’s instinct to weigh threats—whether sticking to the safe confines of sovereign-backed instruments or venturing into riskier territories with higher potential returns.

After years of low yields followed by the carnage in 2022 as central banks aggressively fight inflation, returns in the fixed income markets have rebounded. This is buoyed by the end of the Fed tightening cycle, with high inflation under control.

With recessionary fears seemingly unfounded, investors don’t have to go far up the fixed income risk spectrum to obtain yields, be they short-term government bonds, investment grade credit, asset-backed securities, loans or high yield etc. How do these public market opportunities compare with the less liquid private credit?

Is term premia back on the cards? Should investors start adding duration, or is that even necessary? How should investors approach the management of liquidity risk in credit exposures?

Delving Deeper into Private Credit

One increasingly vital segment of the credit market is private credit. Like the deep, often unseen networks of water sources elephants remember and rely upon in arid landscapes, private credit provides an essential but less visible stream of capital.

In an era where traditional lending from banks is constrained by regulations, private credit has emerged as a crucial funding source for businesses, often more flexible than public debt markets.

Investors willing to navigate this terrain can unlock attractive yields, but they must also be mindful of liquidity risks, borrower transparency, and the need for deep due diligence—just as an elephant’s survival depends on its ability to recall the safest paths through uncertain environments.

Delving deeper into the world of private credit beyond direct lending and real estate debt, sophisticated investors are also exploring the asset-based finance (ABF) taxonomy, including significant risk transfer (SRT), speciality finance and other forms of esoteric credit.

While these may present unique alpha opportunities, how do they compare with their public market counterparts such as collateralised loan obligations (CLOs), in terms of relative value, risk and liquidity?

Resilience in the long term

In today’s financial environment, where interest rates are shifting and global debt levels are unprecedented, credit plays an even greater role. With careful allocation, investors can harness the elephant’s eidetic memory: Resilience in downturns, patience in upswings, and unwavering focus on long-term returns.

Enquire about this event