Many financial commentators have suggested that the strong growth of the non‐bank corporate lending market is a short‐term, cyclical trend that could threaten the stability of our financial system. The growth of the non‐bank market can be explained by a long‐term structural shift toward private capital as banks and public markets have transitioned from serving small and medium‐sized companies to larger companies over the past several decades. For investors, private credit presents an attractive opportunity to add diversification and attractive risk-adjusted returns to portfolios. Characteristics such as yield premium over comparable liquid markets, control, upfront economics and low historical volatility and default rates all make this asset class one to consider for a core allocation in investors' portfolios. - Teiki Benveniste, Ares Australia Management. Earn 0.50 CE/CPD hrs on Portfolio Construction Forum