- While most asset classes had significant moves down in 2022 and violent moves up in 2023, private debt was largely uncorrelated to the broad market.
- Including private debt into a core fixed-income asset allocation is looking less like an option and more like a necessity.
- Utilizing Our RiskFirst® process, we incorporated private debt into our clients’ portfolios with the goal of helping them stay within their risk budgets.
1.Through September 30, 2023. Source: Bloomberg, Cliffwater, Redwood. Data as of 2/1/2024. Date Range from 1/1/2022 - 12/31/2023.
- We believe capital preservation is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
Disclosure: This piece is for informational purposes only and contains opinions that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. The objectives mentioned are not guaranteed to be achieved. Investors cannot invest directly in any of the indices mentioned above. RiskFirst® is a registered trademark of Redwood Investment Management, LLC.
Indices: Aggregate Bonds are represented by the Bloomberg U.S. Aggregate Bond index which measured the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency). U.S. Treasury Bonds are represented by the Bloomberg US Treasury Index, which measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury. Investment-Grade Corporate Bonds are represented by the Bloomberg US Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD denominated securities publicly issued by US and non-US industrial, utility, and financial issuers. Private Debt is represented by the Cliffwater Direct Lending Index which seeks to measure the unlevered, gross of fee performance of US middle market corporate loans, as represented by the asset-weighted performance of the underlying assets of Business Development Companies that satisfy certain eligibility criteria.