Private debt is not just a financing tool – it can be a strategic lever for sustainable transformation. This article explores the sustainability benefits derived from private debt investments, and the mechanisms through which they are achieved.
It will (1) explore the current investment terrain, (2) investigate the limitations of short-termism in public markets, and (3) argue that sustainability-linked loans (SLLs) can bolster big moves for individual investments, whilst highlighting their risks. Taking this one step further, it will (4) evaluate the impact of sustainability-linked carry for the investment manager, and (5) underscore the importance of market collaboration to drive systems-level sustainable impact.
Private debt takes many forms; this article will focus on direct lending to create impact. Direct lending makes over 60% of capital raised in 2024 and 37% of the global private credit AUM [Pitchbook,2024].1 Therefore, direct lending is a relevant asset class and the focus of this discussion.
in VBA Journaal door Katy Husband