The CEO of Churchill Asset Management, Ken Kencel, has had an impressive career in the investment industry. With more than 30 years of experience, Kencel has held various executive positions at leading financial institutions such as Bank of America and Bear Stearns.
In a recent interview, Kencel shared insights into how Churchill Asset Management approaches private credit. The firm manages $46 billion in assets and is known for its unique approach to lending to middle-market firms. Churchill Asset Management not only provides debt financing but also takes an equity stake in the firms they invest in. This approach aligns the firm’s interests with those of their clients, ensuring that they are working towards the same goals.
Kencel emphasized the importance of selectivity in the firms and kinds of business they choose to invest in. This approach has served the firm well, as they did not have a single default during the entire pandemic era. Kencel attributed this success to the firm’s focus on investing in high-quality companies with strong management teams and solid business models.
Churchill Asset Management’s approach to private credit has gained attention from investors seeking non-traditional sources of yield. As interest rates remain low, investors are increasingly turning to alternative investment strategies to generate returns. Private credit, which involves lending to privately-held companies, is one such strategy.
Kencel believes that the demand for private credit will continue to grow as investors seek higher yields and look for ways to diversify their portfolios. However, he cautions that investors should be selective when choosing private credit managers, as not all managers are created equal.
Overall, Kencel’s interview provides valuable insights into the world of private credit and the approach that Churchill Asset Management takes to this alternative investment strategy. Investors interested in learning more about private credit and Churchill Asset Management’s approach can access the full conversation and transcript via the link provided.
Private credit has gained traction in recent years, particularly among institutional investors such as pension funds and endowments. This is due in part to the attractive returns that private credit can provide. Private credit managers can offer yields that are higher than those of traditional fixed-income investments such as bonds.
However, private credit also carries risks. Investing in privately-held companies comes with a higher level of risk compared to investing in public companies. Private companies are not subject to the same regulatory requirements and scrutiny as public companies, which can make it more difficult to assess their financial health and potential risks.
Churchill Asset Management mitigates these risks by conducting extensive due diligence on potential investments. The firm’s investment team has a deep understanding of the middle-market landscape and looks for companies with strong fundamentals and solid management teams.
Kencel also stressed the importance of having a long-term investment horizon when it comes to private credit. Private credit investments are typically illiquid, meaning that they cannot be easily sold or traded. This requires investors to have a long-term perspective and be willing to hold their investments for an extended period of time.
Despite the risks and challenges associated with private credit investing, Kencel believes that it can be a valuable addition to investors’ portfolios. Private credit can offer attractive yields, diversification benefits, and exposure to non-traditional assets.
In conclusion, Kencel’s interview provides valuable insights into the world of private credit investing and Churchill Asset Management’s approach to this alternative investment strategy. While private credit carries risks, Kencel believes that it can be a valuable addition to investors’ portfolios if approached with the right mindset and due diligence. Investors interested in learning more about private credit and Churchill Asset Management’s approach can access the full conversation and transcript via the link provided.
