Andy Sieg, head of Citi Wealth Management, continues to advise clients to maintain allocations in private credit. He characterizes private credit and private equity as long-term investment components rather than short-term trades, noting that typical client investment horizons span 10 to 30 years.
The sector faces liquidity challenges as withdrawal requests at non-traded business development companies (BDCs) consistently exceed the standard 5% quarterly limit. Data indicates that requests at 11 of the 14 largest non-traded BDCs averaged 13.0% in the third quarter, a slight decrease from 13.9% in the second quarter.
Market data from Valuation Research shows that many listed BDCs are currently trading at a discount of 10% to 20% relative to the reported value of their underlying holdings. The International Monetary Fund recently identified private credit as a potential factor that could amplify market stress if borrowers utilize committed credit lines during tightening conditions.
Citi reported its tenth consecutive quarter of wealth revenue growth, with a 15% increase in the third quarter compared to the previous year. The bank attracted $38 billion in net new investment assets during this period, with organic flow growth exceeding 10%.
