The next step in the maturation of private credit investment will be stronger differentiation between investment stages targeted by individual strategies, according to Galvanize’s co-head of credit and capital solutions.

As private credit makes up an increasingly important part of the capital stack for energy and infrastructure finance, general partners in the space should more clearly communicate which stage of investment they’re targeting, Chris Creed said during an interview for the Crossroads podcast.

“One of the things that I think that the private equity industry does that is better than the private credit industry is create a taxonomy for investors to understand what component of the private equity market do they invest in,” said Creed.

“You have the pre-seed and seed investments. You have your venture. You have your growth equity. You have your leverage buyout equity, and then eventually you get public equity markets. In the private credit markets, we’re just now beginning to understand that there should be a taxonomy within private credit,” he added.

That focus on a ‘taxonomy’ within the private credit universe bears out in Galvanize’s concentration on opportunities in growth credit, an area of the energy sector Creed believes has been underserved by lenders.

The emphasis on growth credit falls within Galvanize’s broader strategy targeting investments tied to sustainability and energy innovation. It has not changed, said Creed, even as many in the industry have softened their focus on positive climate impacts as a component of their return profile.

“I don’t view these as different things,” he said. “The galvanized thesis is that there are excess returns by investing in sustainable investments. And so if we do our job, we get the alpha because of the impact. And I think that is a reframing that we wish other investors would also take.”

Listen to the full interview here.