US investment banker J Pierpont Morgan over a century ago gave a stock market forecast which remains as accurate today as then. “I can tell you exactly what it will do for years to come. It will fluctuate,” he famously said. History shows investors should always expect the unexpected – which simply underscores the benefits of adding private debt to a portfolio. It can deliver a consistent yield with lower volatility than other asset classes to help smooth the inevitable cyclical returns of a diversified portfolio. Without it, investors are more vulnerable to the market vicissitudes that can up-end bond and equity strategies with little notice.

Andrew Tremain