What is Private Credit, Why Does it Matter, and How Egg Capital Navigates the Opportunity
- EricFitzgerald
- Apr 22, 2025
- 3 min read
Updated: Apr 27, 2025
As public markets remain volatile and traditional lending tightens, more investors are discovering the strength of private credit. This rapidly growing asset class offers consistent income, downside protection, and access to collateral-backed opportunities - all without the daily swings of public markets.
At Egg Capital, we believe private credit plays a critical role in a modern portfolio - and here’s why.
What Is Private Credit?
Private credit refers to loans made directly to borrowers outside of the public bond markets. These are not traded securities - they’re custom, negotiated investments between lenders and borrowers.
The spectrum of private credit is broad, including:
Direct Lending – Senior and unitranche loans to middle-market companies
Real Estate Credit – Bridge loans and transitional debt secured by CRE
Specialty Finance – Lending against receivables, royalties, or niche assets
Distressed & Special Situations – Capital for turnaround or time-sensitive deals
Real Assets Credit – Debt backed by infrastructure, energy, or transportation assets
Why Investors Are Paying Attention
Private credit has some powerful features that align well with current market needs:
Current Yield – Often floating rate, with potential to benefit from rising interest rates
Downside Protection – Seniority in the capital stack, collateralized loans, and lender controls
Lower Volatility – Assets are privately held and less correlated to public market swings
Shorter Duration – Most funds return capital faster than PE or hedge strategies
Attractive Return Profile
Despite being lower in risk than equity, private credit has historically delivered strong risk-adjusted returns.
A big part of that is due to the “illiquidity premium” - investors are compensated for locking up capital, which lenders use to negotiate better pricing.
Strong Capital Structures
Unlike high-leverage equity strategies, most private credit sits low in the capital stack and is backed by real assets or enterprise value.
Senior debt has remained largely consistent across a 7-year period. Total enterprise value multiples have increased over that time, providing a greater valuation cushion for creditors.
Even in tough markets, loss ratios have remained manageable. Direct lending defaults typically range from 0.5–2.0%. Mezzanine and Distressed & Special Situations (not depicted here) have generally experienced higher loss ratios than direct lending, typically between 2.5% and 8%, though commensurate with the higher risk-return profile of those strategies.
How We Invest at Egg Capital
Our private credit approach focuses on three high-conviction areas:
Real Estate Credit – Transitional, short-term loans secured by high-quality assets
Specialty Credit – Niche, collateralized strategies offering asymmetric risk/return
Institutional Funds – Select access to managers with deep track records and low LTV exposure
A Final Thought
The private credit landscape is expanding - but not all credit is created equal. At Egg Capital, we bring decades of institutional experience to the private investment space. We focus exclusively on high-conviction, asset-backed strategies - with a deep emphasis on underwriting, alignment, and investor trust. Our credit opportunities are designed to deliver consistent income, backed by real assets, and structured for downside protection in any market.
If you're looking for a thoughtful, experienced partner to help you build reliable cash flow in private credit - Egg Capital is built for you.
Join our Investor Community to stay in the loop on upcoming opportunities and to learn more about how we approach real estate credit.
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