Private debt

As banks retrench from corporate lending, the resultant funding gap is creating a wide range of investment opportunities for credit specialists, including direct lending, distressed debt and special situations. Historically low interest rates have required investors to diversify away from traditional fixed income to seek out alternative sources of yield. And with their floating rate profile, senior secured loans offer effective downside protection in a recessionary environment.

Direct access to private debt gives Pictet’s investors the opportunity to gain exposure to a single, precise investment philosophy and a clearer insight into asset selection within a clearly defined, core investment strategy.
We pursue a pan-European mandate and operate a bilateral basis, meaning we originate and self-structure every senior secured loan. Each individual portfolio asset is carefully selected and structured with significant controls to provide robust downside protection. With internal seed capital provided by the Pictet Group, investors can take comfort from a trusted partnership built on a mutual alignment of interests.

We are long-term partners for growth in the businesses we invest with. As well as financial capital we also provide knowledge sharing, best practices and strategic operational guidance: all key value-add services.
ESG considerations are a central tenet of the portfolio construction approach. Leveraging the team’s experience – and the institutional quality of the wider Pictet Group – every direct lending opportunity is considered not only from a financial perspective but in terms of how best to help companies achieve their long-term sustainability goals. 
Given Pictet’s heritage as a credit institution, we have the skillset, the expertise and a proven track record to deliver the best outcomes. The accumulation of knowledge, expertise and data over the last 50 years puts us in a strong position to provide carefully constructed direct lending opportunities to those who need flexible, bespoke solutions to meet their individual business needs.

We invest in best-in-class managers who have stood the test of time across different cycles and whose track records pass the most robust scrutiny. Our ability to access leading talent is a key advantage to those who may not have the ability, or experience to invest directly in the asset class.
Taking a multi-manager approach enables investors to earn returns from a diverse mix of senior secured loans. As the coupons are floating rate, they not only provide protection from higher inflation, they also provide additional upside when interest rates rise.

By overseeing a flexible investment mandate, we have the latitude to invest in GPs across the spectrum of alternative credit strategies. This allows for a more opportunistic approach to portfolio construction. By cherry picking our spots within the credit cycle, we tilt the portfolio towards parts of the credit market that provide the best risk/reward potential. Our first fund vintage, which launched in 2020 during the COVID-19 pandemic, had a distressed debt tilt.
We anticipate the next vintage will have more of a tilt towards hard asset-backed strategies – i.e. shipping, real estate, aviation and specialty finance.