What to Consider When Investing in a Private Credit Manager

1. What to Consider When Investing in a Private Credit Manager Investing in private credit can be a lucrative opportunity, offering potential for high returns and diversification in your investment portfolio. However, choosing the right private credit manager is crucial to achieving your financial goals. Here are key factors to consider when making this important decision. Understanding Private Credit Private credit refers to debt investments that are not issued or traded on public markets. These can include loans to small and medium-sized businesses, real estate loans, and other forms of non-bank lending. Private credit managers are responsible for sourcing, underwriting, and managing these investments. Key Considerations When Choosing a Private Credit Manager 1. Track Record and Experience ○ Performance History: Review the manager’s historical performance to assess their ability to generate consistent returns. Look at their track record during various market conditions to gauge their resilience and adaptability. ○ Experience: Consider the experience of the management team. Experienced managers are likely to have better risk assessment and mitigation strategies. 2. Investment Strategy ○ Focus and Expertise: Understand the manager’s investment strategy and areas of expertise. Some may specialize in specific sectors, such as real estate or corporate loans, while others may have a broader focus. ○ Risk Management: Evaluate their approach to risk management. A good manager should have robust processes in place to assess and mitigate risks associated with private credit investments. 3. Due Diligence Process ○ Thoroughness: Investigate the manager’s due diligence process. Effective due diligence is crucial for identifying viable investment opportunities and avoiding potential pitfalls. ○ Transparency: The manager should be transparent about their due diligence findings and willing to share detailed information about their investment decisions. 4. Fee Structure ○ Costs: Understand the fee structure and how it will impact your returns. Common fees include management fees, performance fees, and other administrative costs. ○ Alignment of Interests: Ensure that the fee structure aligns the manager’s interests with those of the investors. Performance-based fees can incentivize managers to achieve better results. 5. Liquidity and Investment Horizon

2. Lock-Up Period: Be aware of the lock-up period, during which your investment cannot be withdrawn. Private credit investments often have longer lock-up periods compared to public market investments. Redemption Terms: Understand the terms under which you can redeem your investment. This includes any penalties or notice periods required for withdrawal. 6. Reputation and References ○ Reputation: Research the manager’s reputation in the industry. Positive feedback from other investors and industry professionals can provide valuable insights. ○ ○