Private Credit Is In Turmoil - Here's My Method And The Picks I Trust

Leo Nelissen50.67K FollowersFollow5ShareSavePlay(18min)Comments(27)SummaryAres Capital Corp. and Capital Southwest Corp. are top BDC picks, offering >10% yields, skilled management, and strong financials.Low leverage and above-average ROE, not P/NAV discounts, are critical for BDC selection and risk mitigation.Current market fears around private credit stem from asset quality doubts, leverage risks, and potential systemic contagion.Prudent risk management is essential due to private credit’s cyclicality and industry-wide transparency concerns. Ad Gr/iStock via Getty Images Introduction What’s the most hated industry right now? I think it’s a battle between software and private credit. And if I had to pick a “winner,” it would likely be private credit, given that these headlines are often connected to systemic risks. After all, if weThis article was written byLeo Nelissen50.67K FollowersFollowLeo Nelissen is a macro-focused equity strategist and long-term investor with more than a decade of experience on Seeking Alpha, where he has built a following of over 50,000 readers. His work combines big-picture macro analysis, geopolitical insight, and bottom-up research to identify high-quality businesses and long-term investment opportunities. He is the founder of Main Street Alpha, an upcoming investment group focused on macro strategy, real portfolios, dividend investing, and disciplined capital allocation for long-term investors.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.