Conventional wisdom claims an unsecured listed bond is “safer” than a private loan. Global managers show the opposite: risk is defined by structure and control, not by a ticker.
- Collateral & seniority – Properly structured private loans are senior and secured; most public bonds are not.
- Strict governance – Private lenders impose hard covenants, monitor real-time data, and act early.
- Incentive alignment – First-loss co-investment and independent committees (global best practice) cut agency risk and protect LP capital.
Outcome: Expected loss on secured private loans can be lower than on unsecured BBB bonds, while yielding more. Post-Basel III, investors seek this mix of discipline, protection, and superior returns.
Guiding premise at Cordada: return stems from collateral quality and control rigor, not market liquidity.