Investment grade private credit
IG private credit can offer the potential for enhanced returns, diversified exposures and robust structural protections
Overview
In today’s ever-evolving market landscape, investors are under constant pressure to find diversified investment opportunities that carry both higher potential returns and lower downside risk. As the investment grade (IG) private credit market expands in breadth and depth, it offers a compelling value proposition relative to public markets in both standalone and more solutions-oriented allocations.
Value of allocating to IG private credit
Average of +100bps of spread premium1
Additional potential sources of return over life of the deal via covenant-driven lifecycle payments:
- Coupon step-ups
- Amendment & waiver fees
- Ancillary fees
- Credit event-related income
- Early prepayment protection
Minimal public overlap with differentiated exposures by:
- Issuer
- Sector
- Geography
- Maturity
- Fills 10- to 30-year demand
Typical recovery rate: 62% vs. 48% in public market2
- Market is heavily skewed towards senior secured issuances
- Issuer market reliance drives good behavior
- Covenants (financial, negative and reporting) can result in lower credit losses over the life cycle of assets
Our capabilities
At L&G – Asset Management, America, our clients are offered four distinct verticals to invest, all of which may allow for better liquidity management that facilitates better risk-adjusted returns:
Corporate debt
Lending to companies who seek to borrow outside the public markets
Infrastructure debt
Financing a range of projects in sectors such as transport, energy, social, digital, municipalities and not-for-profits
Alternative debt
Diverse alternative finance strategies including structured credit, fund finance and unique securitizations
Real estate debt
Senior commercial mortgage loans (CML’s) secured against commercial property: multifamily, industrial, office, retail and storage
Solutions designed for your needs
Our IG private credit solutions are designed to address your specific client needs:
Enhancing existing strategies
Incorporating into traditional public credit strategies or custom credit portfolios (i.e., buy and maintain / cashflow matching)
Opportunistic portfolio construction
Reallocating from public to private fixed income as attractive deals come to market
Dedicated portfolios
Providing exposure into hard to access sectors such as infrastructure (energy, social), sports media and other consumer industries
Diversified investment options
Primarily investing in a diversified portfolio of investment grade private credit assets
Working with us
We believe the following set us apart from our competition:
Enhanced return potential
Our strategies – customized for our clients’ unique appetites – have delivered roughly 100 basis points3 of average spread premium relative to public comparables and experienced zero defaults since inception.
Liability-first portfolio design
L&G’s insurance heritage and our expertise in liability-driven investing shape our emphasis on capital preservation and liability alignment, with our buy-and-hold philosophy potentially driving long-term value for our clients.
Global public-private credit platform
Deep relationships may give us unique market access while our integrated credit insights help shape our relative-value views.
Independent governance
Our dual-track underwriting approval process provides rigorous assessment and challenge.
Read our insights
IG private credit – shifting benefits up the risk spectrum
Investors may want to consider moving up the risk spectrum into investment grade private credit to capture the potential benefits of the asset class with more favorable exposure to leverage and certainty of cashflows.
1. Data shown represents a single NAIC-regulated insurance company affiliated with L&G since its private credit account’s inception. Referenced data covers April 21, 2017 – June 30, 2026. Population includes L&G private debt investments.
2. The Society of Actuaries: 2003-2015 Credit Risk Loss Experience Study: Private Placement (IG private credit) Bonds, Senior unsecured debt.
3. Data shown represents a single NAIC-regulated insurance company affiliated with L&G since its private credit account’s inception. Referenced data covers April 21, 2017 – June 30, 2026. Population includes L&G private debt investments.
L&G – Asset Management, America leverages the long-established business model and resources of its affiliate, L&G – Asset Management, to support L&G – Asset Management, America's efforts in delivering Private Market strategies.
The material in this presentation regarding Legal & General Investment Management America, Inc. (“L&G – Asset Management, America”) is confidential, intended solely for the person to whom it has been delivered and may not be reproduced or distributed. The material provided is for informational purposes only as a one-on-one presentation, and is not intended as a solicitation to buy or sell any securities or other financial instruments or to provide any investment advice or service. L&G – Asset Management, America does not guarantee the timeliness, sequence, accuracy or completeness of information included. The information contained in this presentation, including, without limitation, forward looking statements, portfolio construction and parameters, markets and instruments traded, and strategies employed, reflects L&G – Asset Management, America’s views as of the date hereof and may be changed in response to L&G – Asset Management, America’s perception of changing market conditions, or otherwise, without further notice to you.
Accordingly, the information herein should not be relied on in making any investment decision, as an investment always carries with it the risk of loss and the vulnerability to changing economic, market or political conditions, including but not limited to changes in interest rates, issuer, credit and inflation risk, foreign exchange rates, securities prices, market indexes, operational or financial conditions of companies or other factors. Past performance should not be taken as an indication or guarantee of future performance and no representation, express or implied, is made regarding future performance or that L&G – Asset Management, America’s investment or risk management process will be successful.
In certain strategies, L&G – Asset Management, America might utilize derivative securities which inherently include a higher risk than other investments strategies. Investors should consider these risks with the understanding that the strategy may not be successful and work in all market conditions.
Reference to an index does not imply that an L&G – Asset Management, America portfolio will achieve returns, volatility or other results similar to the index. You cannot invest directly in an index, therefore, the composition of a benchmark index may not reflect the manner in which an L&G – Asset Management, America portfolio is constructed in relation to expected or achieved returns, investment holdings, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility, or tracking error targets, all of which are subject to change over time.
Unless otherwise stated, references herein to “LGIM”, “we” and “us” are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.