Kosters Predicts Rate Cut Will Spur Private Credit Fund Sales

The Federal Reserve’s interest rate cut Wednesday and macroeconomic uncertainty could trigger selling by investors in private credit funds who are looking to rebalance their portfolios, according to Antares Capital’s Olga Kosters.

Some market participants are positioning for what could be a broader selloff in private credit, particularly if falling rates compress yields and push investors to reassess their exposure, said Kosters, the firm’s head of credit secondaries.

Private fund investors, known as limited partners, tend to rebalance their assets relative to their liabilities, risk appetite and perception of a relative risk return, she said in an interview. ...