Asset-backed finance (ABF) is one of the fastest-growing areas of private credit, but growth alone does not explain its potential role in a portfolio. With exposure to different borrowers, assets, and cash flows, ABF may offer investors another source of income and diversification beyond traditional corporate credit.

In our latest Insights from the PM’s Desk, Brian Marcus sits down with Akhil Bansal, to unpack the evolving ABF opportunity set. They explore what differentiates ABF from traditional corporate credit, what’s driving its growth, and why underwriting, structure, and manager selection matter when evaluating opportunities.

Asset-backed finance in portfolio construction
Current Time 0:00
Duration 9:27
Loaded: 1.05%
Stream Type LIVE
Remaining Time 9:27
1x
  • Chapters
  • en (Main), selected
Key takeaways
  • ABF extends beyond traditional corporate credit: Asset-backed finance can provide exposure to different borrowers, underlying assets, and cash flows, broadening the credit opportunity set available to investors
  • ABF may provide differentiated sources of income and diversification: Its underlying exposures may complement traditional corporate credit allocations and offer another potential source of portfolio diversification
  • The opportunity set is broad: ABF spans a range of assets, structures, and sources of risk, making an understanding of the underlying exposure important when evaluating individual opportunities
  • Underwriting and structure matter: As the market grows, disciplined underwriting and thoughtful structuring remain important considerations for assessing risk and identifying opportunities
  • Manager selection can influence how investors access the market: Given the breadth and complexity of ABF, experience evaluating assets, structures, and risks may be an important consideration when selecting a manager
Two people standing at stairwell, looking a laptop

Go deeper on the evolving role of fixed income in portfolios and where asset-backed finance may fit as investors consider income, diversification, and risk.

Read the paper

Insights from the PM’s Desk is a video series where leaders across our firm share the trends shaping private markets, inviting advisors into the expertise that powers clients’ portfolios.

See more episodes

Economic and market views and forecasts reflect our judgment as of the date of this video and are subject to change without notice. In particular, forecasts are estimated, based on assumptions, and may change materially as economic and market conditions change. Pacharbor Capital Group has no obligation to provide updates or changes to these forecasts. Certain information contained herein has been obtained from sources prepared by other parties, which in certain cases have not been updated through the date hereof. While such information is believed to be reliable for the purpose used herein, Pacharbor Capital Group and its affiliates assume no responsibility for the accuracy, completeness or fairness of such information. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. We are not soliciting any action based on this material. It is general information. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors.

Position Pacharbor Capital Group Global CreditExpand Access to Private Markets
Investment Strategies & Solutions>Secondaries & Co-InvestmentsPeople, Platform & Purpose>Internal Leadership, Talent & ExpertiseInvestment Strategies & Solutions>Products & FundsPrivate Markets Education>Benefits of Private Market Investing
Global Credit