At a recent hedge fund conference, which our team attended primarily to meet new managers, we also spoke with institutional allocators. We were surprised to hear both groups express a common concern: the potential “unwinding” of illiquid assets, particularly private credit.
While “unwind” is an imprecise term—implying anything from gradual performance erosion to a full-blown liquidity event—the consensus is that private markets are overextended. If stress emerges, private credit will likely falter first.
