Private Credit

Credit Secondaries

Pursue liquidity and portfolio flexibility through credit secondaries—strategic transactions enabling the buying and selling of existing credit assets on the secondary market.

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Overview Team Insights Contact

Overview

Investment Strategy

Credit Secondaries provides access to private credit secondary investments in the North American and European middle market, and customized liquidity solutions for fund managers. Key tenets of our strategy include: 

  • Focus on middle market credit portfolios (underlying issuers with $10 - $100mm of EBITDA)
  • Predominantly focused on the senior secured direct lending market, though flexibility to consider more opportunistic credit asset classes
  • Industry generalist approach
  • Geographic focus on North America and Western Europe
  • Balanced mix of LP-led and GP-led transactions
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GP- and LP-led Transactions
  • Navigate market cycles and enhance return potential with a balanced approach across GP-led and LP-led transactions
  • LP-led transactions for broader diversification1, GP-led transactions may have strong alpha generation ability
Investment Focus
  • Focus on what we believe to be high-quality assets with predictable cash flows and low loss ratios
  • Potential for return enhancement through targeted allocation further down the credit spectrum
US & EUROPE
  • Ability to underwrite transactions in the U.S. and Europe, leveraging regional teams’ market knowledge
  • Slight overweight U.S., given larger market size
Market Segment
  • Focus on the middle market, characterized by higher spreads, lower leverage ratios, and tighter covenants
  • PGIM with decades of experience investing in the middle market

Differentiated Approach

Proactive Sourcing

Building and maintain strong relationships with potential secondary sellers, including LPs and GPs, with the goal of learning about secondary opportunities before such opportunities officially come to market

Middle Market Focus 

We consider the middle market the most attractive opportunity set in the credit secondaries market, given its deep pool of secondary assets addressed by a limited set of buyers. Underlying middle market portfolios can also often benefit from higher spreads and better covenant protections than exist in larger parts of the private credit sector

Thoughtful Portfolio Construction 

Emphasize risk management through a disciplined approach to portfolio construction predominantly focused on investing in private credit funds that themselves primarily invest in direct lending opportunities, i.e. first-lien, senior secured debt securities which are typically characterized by predictable cash flows, lower risk of default, and high recovery rates

Customization    

Sustaining a constant dialogue with potential sellers, which allows us to develop tailor-made solutions with high desgrees of seller-specific customization

Team

Investment Committee

Matt Douglass

Head of Private Credit

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Josh Shipley

Managing Director, Global Corporate Finance Partner, Direct Lending

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Alex Stuart

Managing Director, Credit Secondaries

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Maëlle Reichenbach

Senior Principal, Credit Secondaries

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Dr. Stephan Wessel 

CEO, Managing Partner

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Dan Klima

Head of North America, Managing Partner

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Insights

Featured Credit Secondaries Insights

1 Diversification does not assure a profit or protect against loss in declining markets

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These materials are for informational or educational purposes only.

All investments involve risks, including possible loss of principal. Past performance is not indicative of future results.

The information contained herein is provided by PGIM, the principal asset management business of Prudential Financial, Inc. (PFI), and a trading name of PGIM, Inc. and its global subsidiaries. PGIM, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training.

In the United Kingdom, information is issued by PGIM Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 193418). In the European Economic Area (“EEA”), information is issued by PGIM Netherlands B.V. with registered office: Eduard van Beinumstraat 6 1077CZ, Amsterdam, The Netherlands. PGIM Netherlands B.V. is, authorised by the Autoriteit Financiële Markten (“AFM”) in the Netherlands (Registration number 15003620) and operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Limited in reliance of provisions, exemptions or licenses available to PGIM Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Limited and/or PGIM Netherlands B.V. to persons who are professional clients as defined under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II). In Italy, information is provided by PGIM Limited authorized to operate in Italy by Commissione Nazionale per le Società e la Borsa (CONSOB).  In Japan, information is provided by PGIM Japan Co., Ltd. (“PGIM Japan”) and/or PGIM Real Estate (Japan) Ltd. (“PGIMREJ”). PGIM Japan, a registered Financial Instruments Business Operator with the Financial Services Agency of Japan offers various investment management services in Japan. PGIMREJ is a Japanese real estate asset manager that is registered with the Kanto Local Finance Bureau of Japan. In Hong Kong, information is provided by PGIM (Hong Kong) Limited, a regulated entity with the Securities & Futures Commission in Hong Kong to professional investors as defined in Section 1 of Part 1 of Schedule 1 of the Securities and Futures Ordinance (Cap. 571). In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (“PGIM Singapore”), a regulated entity with the Monetary Authority of Singapore under a Capital Markets Services License to conduct fund management and an exempt financial adviser. This material is issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act 2001 of Singapore (the “SFA”) and “accredited investors” and other relevant persons in accordance with the conditions specified in Section 305 of the SFA. In South Korea, information is issued by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean qualified institutional investors on a cross-border basis. In Australia, information is issued by PGIM (Australia) Pty Ltd (“PGIM Australia”) for the general information of its wholesale clients (as defined in the Corporations Act 2001). PGIM Australia is an Australian financial services (“AFS”) licence holder (AFS licence number 544946). The information is provided to wholesale investors in accordance with Schedule 1, Clause 3 of the Financial Markets Conduct Act 2013 in New Zealand. To invest as a wholesale investor in New Zealand, investors must fit the criteria as set out in the Financial Markets Conduct Act 2013. In China, the information is provided at your request and is not intended as investment advice or a recommendation about managing or investing assets. 

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