How to Read a Private Credit AIF Portfolio
Understanding the Credit Return Engine
A list of borrower names is not enough. Investors need exposure size, sector, instrument, seniority, security, LTV, maturity, cash-pay versus accrued interest, covenant status and payment performance.
Reading Protection, Cash Flow and Structure
Concentration should be measured by current exposure and potential follow-on funding.
Maturity walls show when repayments cluster.
Cash-pay and PIK mix reveal the quality of reported income.
Where Credit Risk Becomes Capital Loss
Sector labels can hide common macro risk.
Different borrowers may rely on the same collateral or promoter group.
An ‘on-time’ loan can still have weakening covenant headroom.
Making the Allocation Decision
Before acting, answer five questions in writing: request top-exposure details; map sponsor and group links; review arrears and restructurings; compare current ltv with entry ltv; and track realised exits and recovery time.
A good portfolio report explains both what the fund owns and how each exposure can repay.
Key takeaways
- Concentration should be measured by current exposure and potential follow-on funding.
- Sector labels can hide common macro risk.
- A good portfolio report explains both what the fund owns and how each exposure can repay.
Related questions
What should an investor verify first?
Concentration should be measured by current exposure and potential follow-on funding.
How does the structure affect the investor’s outcome?
Maturity walls show when repayments cluster.
What is the main downside to test?
Sector labels can hide common macro risk.
How should the final decision be made?
A good portfolio report explains both what the fund owns and how each exposure can repay.
Need personalized advice?
Schedule a conversation about your private market allocation goals.
Request an Advisory Call