He is wary about investing in funds that have a large exposure to SME credit. “Small and medium-sized companies often cannot tap the bond markets and have limited access to credit facilities from banks. So my analysis is that they represent higher credit risk,” he says.
“Typically banks offload more of SME credit risk. From an investor point of view I’d rather avoid them as long as I have access to larger companies’ loans.”
In part one of this interview, Morten tells Expert Investor’s Tjibbe Hoekstra how he is navigating the pitfalls of the direct loan space.
