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For institutional investors in Asia

The case for asset-backed lending in private credit portfolios

This paper explores the case for asset-backed lending (ABL) as a differentiated and complementary strategy within private credit portfolios and introduces Victory Park Capital’s (VPC) approach to ABL.


Brendan Carroll

Senior Partner & Co-Founder at Victory Park Capital Advisors (Janus Henderson Investors)


Mar 13, 2025
5 minute read

Key takeaways:

  • The asset-backed opportunity: The global private credit market, currently approaching US$2 trillion in assets under management1, presents a roughly US$40 trillion addressable market for ABL.2 This includes opportunities across consumer finance, real estate, hard assets, and small business lending.
  • Portfolio benefits: Often viewed as an “all-weather” strategy3, ABL can enhance private credit portfolios by providing diversification through exposure to uncorrelated, asset-secured income streams. This has the potential to reduce portfolio volatility and enhance liquidity while delivering attractive unlevered net returns.
  • VPC’s approach to ABL: With an 18-year track record and over US$10.6 billion invested across 225+ transactions4, VPC is an established player in the ABL market. VPC’s proprietary sourcing, risk management, and deal structuring processes are integral to the firm’s operations, forming the foundation of its strategic decision-making and growth to date.

As the private credit market continues to expand and evolve, asset-backed lending (ABL) has emerged as a compelling strategy for investors seeking a diversified return stream. ABL’s defining features are its reliance on tangible or financial assets as collateral and its corresponding limited loss potential and ability to offer cash flows regardless of broad market conditions. These qualities tend to align with the priorities of insurance companies, pensions, endowments, and other institutional investors looking for income potential, quality risk-adjusted returns, and a defensive allocation in their portfolios

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1Source: Preqin, as of December 2024.
2Source: Apollo Analysts Estimates, as of February 2025.
3 “All-weather” speaks to the fact that ABL strategies are designed with the goal of performing consistently across market cycles, seeking to offer stability and opportunity in both expansionary and contractionary environments.
4Victory Park Capital, as of December 2024.

IMPORTANT INFORMATION

This white paper is provided for educational and informational purposes only. The contents hereof should not be construed as investment, legal, tax or other advice. Unless otherwise noted, statements contained in this white paper are based on current expectations, estimates, projections, opinions and beliefs of VPC professionals regarding general market activity, trends and outlook as of the date hereof. Such statements involve known and unknown risks and uncertainties, and undue reliance should not be placed thereon. Neither VPC nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein should be relied upon as a promise or representation as to past or future performance.

Any risk management process discussed includes an effort to monitor and manage risk which should not be confused with and does not imply low risk or the ability to control certain risk factors.

Diversification neither assures a profit nor eliminates the risk of experiencing investment losses.

Private Credit refers to direct lending or debt financing outside of traditional banking, typically involving non-publicly traded companies. It may offer higher returns but comes with increased risk including limited liquidity, reliance on the borrower’s financial health, and less regulatory oversight compared to traditional bank lending.

Asset Backed Lending involves loans secured by assets, where the loan value is based on the value of the collateral offered. While it provides a security cushion, it carries risks such as collateral depreciation, borrower default, and potential liquidity constraints during market downturns.

Janus Henderson Investors makes no representation as to whether any illustration/example mentioned in this document is now or was ever held in any portfolio. Illustrations shown are for the limited purpose of highlighting specific elements of the research process. The examples are not intended to be a recommendation to buy or sell a security, or an indication of the holdings of any portfolio or an indication of performance for the subject company.

Brendan Carroll

Senior Partner & Co-Founder at Victory Park Capital Advisors (Janus Henderson Investors)


Mar 13, 2025
5 minute read

Key takeaways:

  • The asset-backed opportunity: The global private credit market, currently approaching US$2 trillion in assets under management1, presents a roughly US$40 trillion addressable market for ABL.2 This includes opportunities across consumer finance, real estate, hard assets, and small business lending.
  • Portfolio benefits: Often viewed as an “all-weather” strategy3, ABL can enhance private credit portfolios by providing diversification through exposure to uncorrelated, asset-secured income streams. This has the potential to reduce portfolio volatility and enhance liquidity while delivering attractive unlevered net returns.
  • VPC’s approach to ABL: With an 18-year track record and over US$10.6 billion invested across 225+ transactions4, VPC is an established player in the ABL market. VPC’s proprietary sourcing, risk management, and deal structuring processes are integral to the firm’s operations, forming the foundation of its strategic decision-making and growth to date.