CAIA Chronicles Feature: Issue 13, March 2021
Given many of today’s top private debt investors work for niche firms rather than the more well-recognized global firms, we see a parallel narrative, where due diligence processes prioritize getting to know the life goals of the people who make the investments. A recent whitepaper by Arixa Capital, which outlines both qualitative and quantitative steps in private debt due diligence, makes the case that simplicity is key when evaluating a private debt manager, and investors must be able to clearly and concisely articulate their elevator pitch. The authors suggest that “a strategy based on making loans on real estate that you can see and visit for yourself may be safer than an esoteric strategy that involves a degree in finance to understand.”