How can investors protect themselves from the risks associated with private debt managers withholding information

Here are some ways investors can protect themselves from the risks associated with private debt managers withholding information:

Conduct thorough due diligence: Investors should conduct thorough due diligence on private debt managers before investing. This includes reviewing the manager’s track record, investment strategy, portfolio holdings, and risk management procedures 1 .

Ask specific questions: Investors should ask specific questions about the manager’s approach to transparency, including how they disclose information to investors and what information they withhold 2 3 .

Collaborate with other investors: Investors can collaborate with other investors to share information and best practices for evaluating private debt managers and monitoring their investments 4 .

Seek conservative managers: Investors should seek private debt managers with a conservative approach to lending and the capacity not just to underwrite and monitor loans, but also to work out deals 1 .

Understand the risks: Investors should understand the risks associated with private debt investments, including illiquidity, reduced returns, and hidden costs 5 6 .

In summary, investors can protect themselves from the risks associated with private debt managers withholding information by conducting thorough due diligence, asking specific questions, collaborating with other investors, seeking conservative managers, and understanding the risks associated with private debt investments.