In this Global Insight episode of the On Aon podcast, Aon’s investment leaders cut through private credit headlines to define what drives durable outcomes. Drawing on perspectives from the U.S., UK and EMEA, the discussion explains why private credit has become a core component of modern portfolios — and where discipline, structure and alignment create advantage. The conversation focuses on how informed manager selection, intentional liquidity design and governance enable investors to stay ahead as the market continues to scale.
Key Takeaways:
Experts in this episode:
Key Moments:
(4:30) Russ breaks down what private credit is — and what it is not — explaining how it fits alongside public credit and why investors expect higher yield in exchange for reduced liquidity.
(14:50) Comparisons to the 2008 financial crisis are addressed, outlining why today’s private credit market differs due to stronger underwriting, governance and alignment of interest.
(16:30) Private credit’s growth is linked to banks pulling back from lending after the financial crisis, positioning private capital as a durable source of financing rather than a temporary market response.
Soundbites:
Russ Ivinjack:
“If I had to say one word, really across this whole podcast, it's alignment. The alignment of interest is critical. So, making sure bad loans aren’t being issued is of paramount importance. And that’s why we don’t see the same parallels going back to the great financial crisis.”
Alison Trusty:
“This is a structural shift in markets. The banks aren't going to be coming back to lending and the economy needs finance. So private debt will continue to provide that.”
This episode of On Aon was recorded on March 23, 2026.
Intro:
Hello and welcome to On Aon — Aon’s global podcast that explores the top issues affecting businesses around the world. With each week focusing on either a Risk Capital, Human Capital, Industry or Global topic.
This week it’s the turn of our Global Insight, which looks at the big geopolitical, economic and regulatory topics impacting businesses.
And today we’re looking at private credit — an issue that’s currently making financial news around the world.
Exploring this topic are:
Together they look at what’s behind the headlines and what actually matters for investors.
Ari Jacobs (00:00)
Hello and welcome to this Global Insight episode of the On Aon podcast. I'm Ari Jacobs, the global head of Aon's investment practice. And today we're taking a closer look at private credit, a part of the financial markets that's receiving a lot of attention right now. To help us unpack what's driving the headlines and what actually matters for investors, I'm joined by Russ Ivinjack, our global chief investment officer, and also Alison Trusty, co-head of UK and EMEA fixed income at Aon.
Russ brings a global asset allocation and portfolio construction perspective while Alison works closely with our clients across the UK and EMEA and can share what she's seeing in those markets.
So first I'm going to start off with Russ and do a little bit of an education and background on private credit. Maybe tell a little bit about where that matters within Aon's portfolio and why we're positioned well to lead this conversation. Russ.
Russ Ivinjack (00:55)
Great. Thanks, Ari. And let me just remind the audience to what Aon Investments does. So, one, we work with over a thousand clients globally. We have thousand clients in Aon Investments assisting clients on all types of matters from asset allocation to manager selection to portfolio implementation. We advise over $4 trillion in assets globally. And we have what we call the Outsourced Chief Investment Officer business where we oversee over $160 billion of clients' assets on a discretionary basis. We have over 100 colleagues dedicated to researching the markets, investment managers, and implementing portfolios that covers public and private equity, public and private credit, real assets like real estate and infrastructure, and hedge funds, and diversifying strategies.
So we've covered private credit for decades. Really started off with things were much more opportunistic credit, distressed credit, moved into direct lending, that is lending to private equity-owned companies as the primary definition. And it is then expanded into asset-based finance, it's real estate credit, it's strategic risk transfer. So many of these areas that Alison covers on a day-to-day basis. Maybe the final thing I'll note Ari is that on a quarterly basis, we review over 20,000 strategies quantitatively and our team is meeting with over 3,000 investment managers each year to make sure we have a full view on the marketplace in terms of what's going on and what we expect to go on in terms of where our clients are invested as well as trends that we would expect to see as markets evolve.
Ari Jacobs (02:39)
That's incredible, right? So we have a great breath to have this conversation here today. Maybe Allison, I'll ask you to give a couple of introductory comments as well from the UK/EMEA perspective.
Alison Trusty (02:48)
Yeah, think I'd just add, I mean, we've been advising and researching private credit here really since it was a nascent asset class. It's particularly true in Europe where, it really only emerged following the financial crisis, right? Where we had very punitive regulation, banks pulled back from lending and private capital stepped in to fill that structural gap. We've really watched it evolve from that emerging market to really...some sort of two trillion market is today. And really now, it largely mirrors public fixed income markets, both in its breadth and size. So I think that's quite important to remember as we frame the discussion, that really private debt is now just a core part of capital markets.
And it's also, I think we'll touch on this, but we've seen this convergence now across public and private fixed income markets. So I think we see against this backdrop, it's really going to take a flexible approach focused on the outcome and being able to take that flexibility across public and private for the best relative value. So, it's why we've structured our research team at Aon that fixed income covers that full public-to-private spectrum rather than separate teams so that we're capturing that relative value.
Ari Jacobs (04:02)
Right. And so important to note how this has become such a part of the market. So maybe we'll spend a couple of minutes, Russ and Allison, just unpacking a few phrases and level-set on what private credit really is. I think it's a very maybe overused statement at times as to what it is and isn't. And maybe you could spend a few minutes educating the listeners on what private credit is. Russ.
Russ Ivinjack (04:25)
Sure, thank you, Ari. So, we'll start with public credit. That is debt issuance by organizations that is available really to the broad marketplace. So, it is fundraising by a company, by a government, or even to back mortgages on individuals' homes. So, those are the main parts of the public fixed income markets.
The difference when we talk about private credit is usually that is a much more subset of a borrower going to a group of lenders or a single lender to meet their financing needs. And that's why I mentioned before in private credit, it is what we call direct lending. So that is primarily to companies. Most of those companies are private equity-owned, but there's also asset-based finance. So that's airplane leases, rail cars, consumer debt, real estate credit. So it is a vast marketplace. And what I like to say is it's lending, whether it's public or private. What you're doing is you're making a loan to an entity. You're expecting to earn interest and receive your principal back.
And that's why we look at the marketplace very broadly and what's the role of both public and private credit in our clients' portfolios.
Private credit is primarily used for diversification and additional return because you do expect a yield that is higher than public credit markets because you are taking on illiquidity risk with private credit. So, it's not easy to transact like you can with a corporate debt or government debt that is tradable really minute by minute.
Ari Jacobs (05:58)
Thanks Russ. And we're going to unpack a few of those items in the next few moments, but also maybe add to that as well as how your clients in the UK and EMEA are using private credit and their portfolios.
Alison Trusty (06:09)
Yeah, sure. Taking a step back when we first started investing in private capital here, you know, 15 or so years ago, right? Interest rates where near-zero. So was a real, really obvious why you might look to get this yield pick-up from investing in private credit at the time. And that's how a lot of our clients saw it as an extension of their fixed-income portfolio, moving into giving up some liquidity as Russ touched on for a yield pick-up. I guess over time that has evolved into a broader sort of real estate debt.
We've been really active in the credit risk sharing space, for example, and asset-based lending as well. Really exciting this year actually is we are launching our LTAF this year. And for those not familiar, LTAF is a long-term asset fund, and that's essentially going to allow access to private markets for our DC clients. So that's a new development and exciting to be able to provide that access where historically DC clients typically couldn't get access to their private markets and the different strategies in there as well.
So that's a recent development. And then I guess with that, get onto this a bit later, I suppose, it's just the kind of evolution of fund structures in this space as well, which is, again, providing broader access to private markets for a broader client base as well.
Ari Jacobs (07:28)
Yeah, Alison, I'm so glad you brought that up, right? It's certainly a key theme that we here at Aon are focusing on related to bringing the private markets to such a wide range of investors in the UK and what you're doing with LTAFs and similar discussions we're having here in the US. it's an important theme that we keep talking about.
But I want to make sure that we discuss here why private credit is so much in the news right now, maybe first from what we're reading in the US, Russ, and then as well, we're reading in the UK and EMEA.
So, talk a little bit about what's in the news or hearing what we should see through what we should understand when there's all this private credit thematic discussion out there, Russ.
Russ Ivinjack (08:07)
Yeah, it is very topical these days. So, first and foremost, the last decade plus, we've seen private credit grow tremendously in size from really a niche area of the marketplace, where mainly banks providing financing to private organizations, to private credit growing to trillions of dollars.
And it's both investment grade and non-investment grade. And it's in the headlines today is because for quite a while, this area grew, people were saying there was a private credit bubble. Like you can't continue to grow at this side at that same rate. Then you throw in what we call the SaaSpocalypse, which is well, AI and software companies altogether that you won't need any software. And then the redemptions. And that is where there are significant redemptions related to private credit funds, whether it's a, we call it business development company or BDC or interval funds and interval funds is a way for really the masses to access the private credit marketplace.
And it has been a heightened level of redemptions. Now what you need to understand in many of these cases, these funds have really the obligation to pay out a limited amount of the redemption.
Typically for an interval fund, it's 5 % of the net asset value on a quarterly basis. Now, redemptions have been much more. They've been 10 to 15 % in a couple of cases, investors asking for their money.
And then the sponsor of those funds have paid out between five and 7 % of those redemptions.
So the press likes to make note of, they're not paying out the full redemption amount. We're happy to see that the fund managers are following the rules and regulations because you have to act in the best interest of all investors, not only those who want their money today or some of their money today, but those who are long-term investors. And you have to look at those provisions that really protect all investors in those funds.
So, the headlines you want about every day is manager A is limiting redemptions, manager B is limiting redemptions and the amount of redemptions. So, they're really trying to create somewhat of a run on the bank when we don't see this as an issue. They're meeting their obligations as per the regulations.
Ari Jacobs (10:15)
I think that's so important Russ, because with the press, will at times pick up on that. But these investors who went into these funds, they were well aware of these redemption, I'll call them limitations or five or 7 % caps. This is not new. This was always part of the fund structure.
Russ Ivinjack (10:32)
That is correct. So whether you knew it or you didn't know it, if you didn't know it, you should have known. So, it's really enforcing the mechanism of the marketplace.
Alison Trusty (10:41)
Yeah, I would actually add to that. I feel like the industry has grown up really, because we obviously were around through the financial crisis and you saw these open-ended fund structures with liquidity and asset liability mismatches and they perhaps didn't have these gates in place or mechanisms and that created issues. So, I think now the way that these evergreen funds are being structured is a much more robust structure and yeah, as Russ touches on it, it is ensuring that they can meet the liquidity that provided.
Ari Jacobs (11:10)
Thematically, Allison, is there anything different in the UK or EMEA that we're hearing as compared to some of the press that Russ and I just discussed in the U.S.?
Alison Trusty (11:17)
No, it's actually a very similar narrative. I think a lot of focus towards the end of last year and early this year was around the software exposure and AI disruption. It's again, but then it's about looking through the headline. Because we did a just check, I guess, on our managers. if I think of our direct learning managers, for example, most had about less than 10% exposure to software companies in their portfolio.
And then even then, when you look through, they're not all similar, right? So, you could have a medical diagnostic software company that's in highly regulated market that's going to have a much sort of higher, less likely AI disruption than maybe, I don't know, a translation service company. So, it's looking through to even that software exposure of which is at higher risk from the AI disruption as well.
Ari Jacobs (12:08)
That's great. So, Alison, let's stay on the path with you for a minute. Let's talk about how we're discussing this with our clients. Are they asking a lot of questions? Are we changing thematically the way we're looking at our clients investing and maybe in that dig a little bit into the LTAFS that you mentioned before.
Alison Trusty (12:23)
Yeah, I mean, it's definitely, as you say, like FT headlines every week, they're definitely getting questions from clients who just want some comfort around either their private credit exposure that they already have, or if they're looking at it as a new investment.
We published a paper last week just trying to address some of our thoughts around this and what those concerns could be. But actually, I think what's interesting is probably actually just seeing more increased activity and looking at private credit space in general.
Russ touched on this again, it's interesting because I had a client meeting a couple of weeks ago and I think their perception was, well, these are just low-quality companies that the banks aren't lending to. And it's addressing that — that actually, no, to Russ's point, an investment-grade company could just as easily use private capital markets for some of its debt.
And so we've seen that where obviously we've had a benefit of all-in yields and public fixed income has been pretty attractive over the last few years, but that's getting tighter. And so we're starting to see a trend of clients, even in the investment-grade space, seeing private markets as a fixed income replacement or extension.
And back to the sort of point we said at the beginning about this public to private, it's looking at it in its totality of the fixed-income portfolio. Whereas I think historically, we probably were just talking about private debt as a separate private markets allocation. So, I think that's evolving. As you said, we're actually launching two LTAFs so one is going to be for the growth stage and that's going to be higher yielding and then be a mix of private credit, private equity infrastructure, and also pre-retirement LTAF, which is going to be a bit lower-risk, but again, taking advantage of some of the opportunities in investment-grade private credit as well.
Ari Jacobs (14:05)
Great. Russ, would you to add to that?
Russ Ivinjack (14:07)
The key thing is the manager selection, right? Knowing how they source the debt, what their underwriting standards are, how they put portfolios together, and then the vehicle you're investing in. So those are absolutely critical. We've always emphasized manager selection is really the key factor of having a successful private credit program.
Ari Jacobs (14:29)
Yep, great. So, Russ, you've done a great job of educating our clients and our colleagues across the practice, both on the research side, on the client-facing side about what this is and what this isn't. The conversation you and I have, is this 2008 all over again? Should we be worried about this in some kind of systemic way? And if so, or if not, what red flag should we be looking for to suggest that maybe there's something really big here? Help us with that, Russ.
Russ Ivinjack (14:54)
It's a great analogy and everybody likes to bring up the Great Financial Crisis of 2008 relative today. So we do not believe this is anywhere near what's going on with the GFC in 2008. There's a couple of important things to really point out. First and foremost, if you go back to the early 2000s, there was a strong incentive for the debt issuers just to get the debt out the door. The source debt get out the door, didn't matter what the quality was. There was not an alignment of interest. So the marketplace has adjusted tremendously, a lot of it through regulation.
So when our clients invest in private credit, they're hiring a manager who's acting on their behalf as their agent. And one of the key things we look for is alignment of interest. So one, they have to serve our clients well. We see them as fiduciaries. Second, they're putting their own capital in these same bonds, private credit issuance, as alongside our clients. So alignment of interest is key. I had to say one word, really across this whole podcast, it's alignment. The alignment of interest is critical.
So making sure bad loans aren't being issued is paramount importance. And that's why we don't see the same parallels going back to the GFC.
GFC loans were just going out the door to the left and right. It was not with regard to credit quality. We have high regard for the managers. We recommended to our clients that they are making sure they are lending to good companies that are making good loans. And at the same time, they have their own capital and businesses at risk.
Ari Jacobs (16:29)
Alison, what are your thoughts on that?
Alison Trusty (16:31)
Yeah, I think it's interesting because private credit almost was a result of trying to address some of the systemic risks with banks for the financial crisis.
Regulation forced banks to pull back from lending and private credit emerged. But I think also what's interesting about that is if you think about it, and Russ has touched on this, but with private credit funds, they're largely fully-funded from investors' capital.
If they do borrow, maybe it could be 10 to 30 percent, it's usually a kind of revolving credit facility to smooth out the investment period rather than long-term leverage.
If you compare that to banks who probably have what 10% of capital on their balance sheet, it's actually, I think, quite positive for their private debt that it doesn't represent this systemic risk as it were that you saw with some of their banking industry as well. And then, yeah, I'd totally agree with Russ's point here on the manager research side, where you think we've got a very robust approach to how we identify managers that we think will be successful. And yeah, as Russ says, there's that alignment there. And ultimately, the investment industry is fickle. If you underperform and you're doing poor underwriting, you have losses, you very quickly not going to be having an extra fund in the market. There is that incentive for the managers to keep up their robust underwriting standards, even if there's more competition or assets raised.
Ari Jacobs (17:55)
That's great. And look, lot of head nodding here as the three of us are talking about this and important themes that we're trying to share in the market and with our clients regularly.
So maybe Russ and Allison, I'll just ask you to close with any key takeaways from how you're talking to clients, portfolio structure, allocation standpoint. Just would love some last key takeaways from you. Russ, you first please.
Russ Ivinjack (18:14)
The key takeaway is, so we are very constructive on private credit. We see this as a secular trend. That's why we have private credit sit along our public credit analysis. It really is critical to look at all aspects of the credit marketplace.
We like the diversification that has occurred in private credit over the past several years. So diversifying portfolios even more, that pick-up and yield is essential.
Another thing is the vehicle innovation. Managers providing different types of vehicles, broadening the set of investors who can access private credit has really been a win for all institutional investors.
I'll finish with, right, alignment of interest is critical and manager selection is critical in order to deploy really a high-quality portfolio across both public and private markets.
Alison Trusty (19:04)
Yeah, I'd echo Russ's point and I think, yeah, as I say, we're seeing increased demand across all different of our client bases, right? We've got insurance clients, endowments and foundations. As I said, there's LTAF for DC and even for corporate DB clients who may be looking at buyout in a few years’ time, there's still a place for private credit in those portfolios.
And especially now that we've got, you know, these evergreen evolution and structures with evergreen coming forth, it's just allowing different access points to this private market. And to Russ's point, this is a structural shift in markets. The banks aren't going to be coming back to lending and the economy needs finance. So private debt will continue to provide that.
Ari Jacobs (19:45)
Great, Russ and Allison, thanks so much for helping bring some clarity to this really complex topic that's attracting a lot of attention these days.
That's it for today's Global Insight episode on Aon podcast. In the weeks ahead, we'll continue exploring how geopolitical, regulatory, and market developments are shaping the business and investment environment, including a deeper dive into credit solutions from a Risk Capital perspective. Until next time, thanks for listening.
Outro
Thanks for tuning into the latest episode of On Aon. If you enjoyed this episode, don’t forget to subscribe wherever you get your podcasts and be sure to visit Aon.com to learn more about Aon.
We’ll be back next week with another episode — our Risk Capital Insight — where we’ll be looking at another side of credit — specifically Credit Solutions for global energy industry.
SPOKEN DISCLOSURE
Asset figures are as of December 31, 2025, and represent combined assets across Aon’s global advisory affiliates.
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener.
The views and opinions expressed in this podcast are for educational purposes only and do not constitute investment, legal, tax or other professional advice.
They are not an offer or solicitation to buy or sell any security, fund or investment product.
The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, security or strategy.
Statements of fact are from sources considered reliable, but no representation or warranty is made as to their completeness or accuracy.
Diversification and asset allocation does not ensure a profit or protect against loss.
Private credit is not suitable for all investors, and any allocation should be made only after carefully considering investment objectives, time horizon, liquidity needs and risk tolerance, and consulting with appropriate professional advisers.
Aon plc is a large diversified professional services company, and such services are provided through indirect subsidiaries and affiliated entities.
For the purposes of this podcast, Aon Investments collectively refers to the various Aon plc affiliates which provide investment advisory services in jurisdictions worldwide.
The Aon Investment Manager Research & Strategy consists of investment professionals from global advisory affiliates who contribute to investment manager and asset class research.
The research generated by the IM&R Team is shared among Aon’s investment advisory affiliates.
The views and opinions expressed in this episode are those of the speakers and may not necessarily reflect the views of Aon plc or its affiliates.