Private Debt Is Far Broader Than Private Credit

Blue Bay Asset Management /

23-06-2026

RBC BlueBay argues that many investors treat private debt and private credit as interchangeable, despite private credit representing only one segment of a much larger universe that includes infrastructure debt, real estate lending, asset-backed finance and distressed credit strategies.

The report contends that rising rates, narrowing spreads and increasing competition are reducing the attractiveness of traditional senior secured direct lending relative to other private-debt opportunities.
Private debt returns are generated through multiple sources of premium, including credit risk, illiquidity, complexity and strategy-specific characteristics that differ substantially across sub-sectors.
RBC proposes a framework built around five questions—portfolio role, risk drivers, stress performance, implementation requirements and compensation for risk—to help investors construct more deliberate allocations across the private-debt landscape.

Read the full paper for a comprehensive overview of private-debt strategies, portfolio construction considerations and emerging opportunities beyond traditional private credit.