Private debt is set to benefit from Brexit – study

Senior debt strategies are largely protected from low GDP growth and shifts in inflation, unlike investments in equity and bonds, a report has claimed.

Private debt and liquid alternatives are set to be winners from the UK’s vote to leave the European Union, a study has claimed, as reported by PEI‘s sister publication Private Debt Investor.

As many predict a downturn in the UK’s economy following the vote for Brexit, the consultancy firm bfinance argued that it is the asset classes least tied to the effects of low GDP growth and less sensitive to changes in inflation, such as private debt, that are set to benefit long term.

With banks retreating from the market, the report said senior debt strategies would attract investors with their high yields and insulation from the most adverse effects of macroeconomic uncertainty. Mezzanine investments will not fare as well, however, because they have “less of a cushion to protect loans from value declines”.

-Read more by visiting Private Debt Investor.