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(I&PE) Willis Towers Watson is advising institutional investors should look beyond mid-market corporate direct lending to other parts of the private debt universe, such as US residential mortgages or the UK commercial real estate debt market.

According to a report published last week, private debt is now a core asset class for institutional investors, but concentrating on mid-market corporate direct lending is “much too constraining” an approach.

Assets under management in private debt grew to a record $667bn (€557bn) at the end of 2017, up 13% from 2016 and more than tripled in size in the past decade, growing from $204bn as of the end of 2007.