Education / Credit
Understanding Private Credit: Sponsored Vs. Non-Sponsored Financing

Interest rates are high and bank failures are causing banks to tighten lending standards, creating a surge in demand for private credit. As more investors are drawn to the asset class for its attractive yield, we explain why investors allocating to private credit may want exposure to both sponsored and non-sponsored lending.

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It’s worth understanding the two main types of private credit available—sponsored and non-sponsored—and the characteristics and potential benefits of each because having exposure to both can maximize the opportunity set across both types of lending, potentially rewarding investors with a premium on non-sponsored transactions.

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