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The growing popularity of private debt is forcing fund managers to look to external specialists for support, says Greg Myers, global sector head for debt capital markets at Alter Domus.

Non-performing loans, bankruptcy claims and bridging finance are among the niche strategies set to outperform in 2023, says Zach Lewy, founder, CEO and CIO at Arrow Global.

With the banks pulling back and the competitive environment favourable to lenders, Natalie Howard, head of real estate debt, Schroders Capital, insists it’s a great time to consider the property lending sector.

Ratchet mechanisms provide a powerful means to incentivise good performance on impact, says Kartesia’s Coralie De Maesschalck.

A detailed assessment of ESG performance is required for effective due diligence – a harmonised approach needs to be adopted, says Churchill Asset Management’s Mickey Weatherston.

ESG data and KPIs are moving up the agenda in private debt, especially where due diligence and sustainability-linked loans are concerned, say Jason Park, a partner in the Ares Credit Group, and Salma Moolji, European ESG lead at Ares Management.

Managers continue to up their efforts with colleagues and communities, despite the economic challenges, say Paul Woods, director of sustainability, and Jan Wade, group chief people officer, at Arrow Global.

While direct lending remains attractive, investors are looking to new strategies that benefit from dislocation, says Paul Buckley, managing partner at FIRSTavenue Partners.

The investing environment has become volatile and unpredictable, but Isabelle Scemama and Deborah Shire of AXA IM Alts see opportunities ahead for private debt and alternative assets overall.

Transparency is improving as new regulatory initiatives take hold, but fund managers still need to work hard to get a better understanding of what their investors need, say Arendt’s Stéphane Badey, Nicolas Bouveret and Antoine Peter.