In terms of size, duration, quality and the lack of liquidity, the current market situation is being compared to the mid-2000s, just before the global financial crisis. The current build-up in corporate leverage, the decline in credit quality and lower underwriting standards are all consistent with late-cycle credit behaviour last seen in 2005 and 2006. With such financial market vulnerability, lacklustre growth and low inflation, what do investors need to consider as they examine the opportunity set?

This session will cover the evolution of the US and European CLO markets since the financial crisis. It will provide an overview of the sector, discuss the structural changes in CLO 2.0 as well as the lessons learnt, and the development of the CLO marketplace. The session will contrast the idiosyncratic opportunities, the global collateral landscape and the respective risk-return trade-off during a late-stage credit cycle.

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CLOs: Facts vs fiction

Beyond the Chinese economy there are a number of other Asian countries that provide investors with credit opportunities across both emerging and developed Asian economies. This session considers the challenges associated with private credit approaches in each economy and how to navigate the region.

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Private lending: The market opportunity in Asia

As banks withdraw from commodity trade finance this provides funds with a platform to consider the opportunity set. This session considers the options across the supply chain, the ESG connotations of trade finance and the risks associated with defaults.

With liabilities denominated in Australian dollars, asset owners are faced with the challenge of generating adequate returns with diversification. Asset owners are becoming increasingly active in domestic fixed income markets in the search for yield. But with limited public credit, and a highly concentrated and bank denominated local market, does private lending offer a solution? This session explores the role of Australian denominated private lending within portfolios.

After strong equity gains from real asset exposures over the past decade, asset owners are considering transferring some of their equity allocations to infrastructure debt securities for greater protection and lower volatility. How should investors assess risk/return trade-off of international brownfield, development and greenfield opportunities?

With a significant range of private credit managers available for the fixed income or alternative asset buckets, what are the questions that consultants are fielding from the asset owners? Does private credit offer the diversification and reduced portfolio volatility that investors should expect? The session examines the issues that investors need to consider as they determine their allocation to credit, illiquidity challenges and how to factor in leakage and fees.

The start of the 2020s will begin with the lowest interest rates in recent history. As the world returns to a low rate regime - after a brief and explosive attempt at renormalising monetary policy - asset owners are being forced to revisit their investment philosophy to include more unlisted alternatives such as private credit as a source of return. In this session, we hear from asset owners on why they are allocated to private credit and what their expectations are for the sub-asset class?