Arcmont CEO says private credit fundamentals remain strong

Investing.com -- Private credit portfolios continue to show low default rates despite recent retail investor withdrawals, according to Arcmont Asset Management Chief Executive Officer Anthony Fobel.

Speaking Monday at the SuperReturn annual gathering for private capital in Berlin, Fobel questioned whether the industry should pursue retail investors for what is "essentially an illiquid asset class."

"What we are seeing indeed is almost directly the opposite of what we're reading in the press," Fobel said. "In fact what you're actually seeing is contrary to there actually being any kind of negative performance in portfolios."

The conference comes after redemption requests spread from US private credit vehicles to Europe last week. Swiss private equity firm Partners Group Holding AG capped withdrawals at 5% in one of its funds.

Fobel said he has been speaking to peers at other private credit firms and institutional investors who have access to underlying performance data. He predicted the private credit sector, currently worth $1.8 trillion, would reach €4 trillion ($4.6 trillion) by 2030.

The wave of redemption requests follows concerns over artificial intelligence's impact on the sector's software holdings.

Fobel noted that private credit is "overwhelmingly institutionally backed." Conference attendees indicated through an app poll that an end to geopolitical tensions in the Middle East would be the main driver for the sector moving forward.

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