During the era of near-zero or negative interest rates, traditional fixed income delivered minimal returns, prompting investors to turn to private credit for higher yields driven by illiquidity and complexity premia. However, the shift to a higher-for-longer interest rate environment has altered the dynamics and appeal of the asset class. The role of private credit in an investor’s portfolio has “changed a bit” over the years, according to Tero Pesonen, Director for Private Equity and Private Credit at Local Tapiola Asset Management. “When rates were zero or negative, moving to...