“Volatility is now certain. Before, we feared chaos because no-one knew what was coming. Now, it’s priced in” – Alan Schrager, senior partner at Oak Hill Advisors, in the latest episode of Credit Exchange with Lisa Lee.

Focus on Treasury markets, advises Schrager. “As a professional investor, what we look at are actually the Treasury markets. They’re sending this signal that there’s this risk inherent,” he says, speaking to the recent rise in long-term sovereign yields of developed countries. “You always think of the risk premium of the US Treasury to be zero. And now that's really what's changed is that there is a risk premium in there.”

Schrager also discusses how market volatility, macro risk, and private credit are shaping today’s investment landscape. He sees opportunity in stable companies with stressed balance sheets and notes that private credit spreads have held firm while public markets have tightened.

Oak Hill Advisors, which has nearly $100 billion in AUM focused on sub-investment grade corporate debt, is now focusing on trying to provide capital, in either restructuring or refinancing transactions that take decent companies with bad balance sheets and reorganise them.