Credit is a broad asset class. Issuers may be corporate, private, or sovereign; and debt may be traded publicly, directly, or accessed via syndicated or structured products. This toolbox memo takes a look at the practical implementation of Responsible Investment in Credit Strategies.
Alternative Credit managers frequently trade assets that require a degree of subjective judgement in the valuation process. Fair value processes for direct loans and robust credit valuation frameworks are therefore essential and this memo discusses these themes.
In Alternative Credit funds, there are specific conflicts of interest that can arise due to the nature of the strategy. This memo discusses these conflicts in the context of the Alternative Investment Standards and provides guidance on conflicts of interest specific to Alternative Credit.
Alternative Credit strategies often hold illiquid assets. To align investor interests with the underlying portfolio and avoid liquidity mismatches in the fund, more restrictive fund liquidity terms are often required. This memo details some of the key considerations for closed-ended and open-ended credit fund structures