Recent interest rate rises on both sides of the Atlantic and general political and economic uncertainty could see investors rebalance portfolios towards government bonds.
So, for this month’s poll on Life Risk News, we asked our readers what they thought the impact of recent increases in interest rates would have on the alternative credit market generally.
The feedback was convincing. 78.6% of Life Risk News readers think that investors will pull back on their alternative credit allocations due to higher government bond yields making private market debt strategies relatively less attractive; 14.3% think there’s too much uncertainty to make a definite call; and only 7.1% think that investor appetite for alternative credit products will not reduce as a consequence of the current higher interest rate environment.
Alternative credit asset flows data for 2023 won’t be available until mid-2024. However, it’ll be interesting to follow the anecdotal evidence to see whether investors do indeed rebalance in 2023 in favour of more liquid debt exposures.