In a recent contribution to L’Agefi, Daniel Varela, Chief Investment Officer at Piguet Galland, looks at the current dynamics shaping the private debt market.
This segment, which has experienced strong growth over the past decade and now exceeds $2 trillion in assets under management, has become a key source of corporate financing, particularly in the United States.
The shift in the interest-rate environment since 2023 has, however, exposed certain vulnerabilities: rising financing costs, pressure on highly leveraged companies and episodes of stress affecting some funds. These developments primarily reflect a phase of normalisation.
Nevertheless, the risk of contagion to traditional bond markets remains limited, notably due to the segment’s relative size, its illiquid nature and the structure of its investor base.
In this context, the central scenario remains one of a gradual adjustment, with localised losses and greater dispersion in performance.
Read the full contribution on the L’Agefi website (french only)