The clock is ticking on interest rate hikes. Who will win the fight on inflation: the Fed with a soft landing or a recession with a hard one? The answer could either push buyers deeper into illiquid credit or reinforce indecision.

But private credit has never been a timing game. Opportunistic, distressed and liquid credit are influenced by market or economic conditions. Since private credit doesn’t trade its returns depend on all-in coupons, fees and principal repayments. Minimize losses and you drive alpha. But can that be done through all cycles?

Long-term data suggests middle market loan recoveries are better than BSLs because direct lenders in tight buy-and-hold groups cooperate to improve outcomes. Larger syndicates are often composed of funds with different strategies and entry prices, making workout coordination a challenge.