As public alternative-asset managers absorb a reported $265 billion selloff and private credit funds from BCRED to Apollo Debt Solutions have restricted or gated redemptions, Driftwood Capital argues in a new market analysis that current market conditions may reflect investor categorization rather than underlying real estate credit fundamentals.
In “The New Shape of Risk: Private Credit, Real Estate, and the Case for Hotel Credit,” the Miami-based hospitality investment and credit platform contends the current stress is specific to corporate direct lending.
Real estate credit, backed by a deeded, physical, income-producing asset, has characteristics that differ materially from corporate direct lending that has been often evaluated within the broader private credit category by allocation committees treating “private credit” as a single bucket.
Citing a decade of Brookfield return data, the firm notes real estate credit carries a 0.18 correlation
