“CVs are particularly strange in private credit; unlike private equity, these loans have a contractual term,” says Evan Clark, Senior Private Market Analyst at the EDHEC Infrastructure & Private Assets Research Institute.

(…) EDHEC’s Clark says that “valuation-related conflicts of interest are apparent in credit continuation vehicles,” whose assets may include some that have been restructured and hold equity or equity kickers, alongside payment-in-kind. “Private credit is supposed to offer a more senior, current cash paying exposure to private assets,” Clark says. “Yet, managers are increasingly reliant on the same tricks as private equity to deliver liquidity to LPs.”