“We've done our first trades and some of the first trades in the industry in investment grade private,” says Matt Eagan, who heads the full discretion team at Loomis Sayles and oversees USD 80bn of AUM, on the latest edition of the Credit Exchange podcast with Lisa Lee.

Eagan, who sits on the asset manager’s board of directors, likens investing nowadays to Ozzy Osbourne’s song Crazy Train. Structural changes including the ageing of the workforce, the heightened need for security, and the growing US fiscal debt are inflationary factors, and should change how one conceptualises investing, says Eagan.

Credit is a good investment right now, Eagan notes. However, rather than looking at spreads, which are currently tight, Eagan advises focusing on the risk premium.

“People remember episodes where credit has been very tumultuous because that’s where the excesses were,” he says. “Today, they’re not there. The private credit market has derisked the public sector. The private credit market is a behemoth that’s almost become the mirror image of the public markets.”

Private credit will evolve including a huge portion of the market becoming more liquid. Loomis has bought private investment grade credit in the secondary market. It has also co-mingled private credit into its public portfolios, including mutual funds. “We’re not the only one doing this,” he says.

“I think investment grade privates will be one of the biggest ones that'll get to this point, where you’ll see much more secondary market activity.”