Here are some potential killing questions to ask private debt fund managers:
1. How does the fund assess the creditworthiness of potential borrowers, and what is the fund’s approach to risk management and mitigation?
2. Can you provide examples of successful investments made by the fund, and how do you measure the performance of your investments?
3. What is the fund’s investment strategy, and how does it differentiate itself from other private debt funds in the market?
4. How does the fund handle defaults or potential credit events, and what is the fund’s strategy for managing liquidity and ensuring timely repayment of loans?
5. What is the typical duration of the fund’s investments, and how does the fund determine the interest rates for the loans it provides?
6. How does the fund ensure that it is not lowering its lending standards just to close deals and put money to work?
7. What is the fund’s approach to portfolio diversification, and how does it balance risk and return across different types of investments?
8. How does the fund stay up-to-date with market trends and changes in the regulatory environment, and how does it adjust its investment strategy accordingly?
9. What is the fund’s track record and performance history, and how has it performed during periods of market volatility or economic downturns?
10. How does the fund ensure that it is meeting the unique portfolio objectives of its investors, and what is the fund’s approach to client service and communication?
These questions can help investors gain a better understanding of the fund’s investment strategy, risk management practices, and overall performance. It’s important to note that these questions are provided as a starting point, and investors may have additional or more specific questions based on their individual investment goals and preferences.
Citations:
[1] https://pe-insights.com/news/2021/09/28/seven-questions-future-of-private-debt-agnes-mazurek/
[2] https://www.washingtonpost.com/business/2023/08/01/private-credit-investors-should-beware-of-riskier-newbies/fc0fb594-30b1-11ee-85dd-5c3c97d6acda_story.html
[3] https://www.bloomberg.com/opinion/articles/2023-08-01/private-credit-investors-should-beware-of-riskier-newbies
[4] https://www.pionline.com/TwinBrook-privatedebt23
[5] https://www.movemeon.com/insight/private-equity-29-questions-you-should-have-answers-to-before-accepting-an-offer/
[6] https://www.privatedebtinvestor.com/covid-19-seven-crucial-questions-for-private-debt/