Private Credit – Why Now? (Second of a Series)

Last Tuesday the winner of the largest Powerball jackpot winner in history – $2.04 billion – was announced (but not yet identified) by the California Lottery. A gas station in Altadena, just north of Pasadena, sold the ticket (10-33-41-47-56). The lucky recipient can elect a lump sum of $1 billion or be paid in installments over thirty years. I’ll take the cash, your honor.

It’s rare (actually, one-in-292.2 million) when timing in portfolio management works to that kind of perfection. Studies have shown that most investors pull money out of markets precisely when they should be putting more in. Fear is a powerful motivator.

A recent WSJ article highlighted the challenges retirees are facing with just such circumstances. As we’ve noted previously public equities and fixed income have been correlated like no other time. This has resulted in an extraordinary downdraft in all liquid asset prices. “Everything on the statement is blood red,” said one investor.