In a recent fireside chat, Sean Low, CEO and CIO of Golden Vision Capital (Singapore) Pte Limited, discussed the best strategies for building a private debt portfolio. The conversation, hosted by Giovanni Amodeo, covered a range of topics including Low’s background, the growth of the private debt industry, and the challenges and opportunities in the market.

Low, who previously worked with GIC, a Singapore sovereign wealth fund, for 17 years, shared his experience in building one of the world’s largest private debt portfolios. He noted that private debt has grown from being a relatively unknown asset class to one of the fastest-growing ones.

Discussing the challenges he faced in the early days, Low highlighted the need for education within GIC and overcoming the dominance of traditional banks. He also touched on the evolution of the private debt industry, particularly after the Global Financial Crisis, which led to new rules restricting what banks could do and subsequently propelled the growth of private debt in the US, Europe, and Asia.

Low also shared his insights on the increasing number of private debt managers, attributing this to the growing demand for the asset class and the expansion of talent pools. He noted that the number of players has increased by at least five times.

When asked about building a private debt portfolio, Low emphasized the importance of understanding one’s risk appetite and the need for portfolio construction. He also highlighted the importance of considering the manager’s track record, their edge in the market, and their approach to portfolio construction.

Looking at the future of private debt, Low believes that it will remain an attractive asset class regardless of interest rate changes. He also shared his aspirations for Golden Vision, aiming to make it a more professional and well-respected investor in the industry.

Key timestamps:

00:09: Introduction
00:38: Background and Experience
01:47: Growth of the Private Debt Industry
03:27: Factors Contributing to Increase in Private Debt Funds
03:55: Factors Affecting Private Debt Portfolio Building
05:44: Geographic Split and Investment Opportunities
06:26: Investment Opportunities in Asia
07:56: Criteria for Selecting a Manager
09:11: Considerations for Private Equity Firms with Private Debt Strategy
10:25: Portfolio Building Complexity
13:23: Selection of Managers Based on Program Size
14:15: Interaction Between LPs and Fund Managers
15:51: Fees and Compensation of Managers
17:26: Attractiveness of Private Debt as an Asset Class
19:06: Challenges in Fundraising
21:28: Unconventional Advice
22:56: Unique Aspects of Golden Vision
23:23: Aspirations for Golden Vision
24:22: Business Metrics and Success
25:35: Conclusion