Scaling private credit requires more than capital. It requires trusted data, according to LSEG Data & Analytics, which argues that as allocations to the asset class grow, so too does the burden of proof on firms to demonstrate they can manage, monitor and defend their valuations.
Private credit has moved from a peripheral allocation to a core part of fixed income strategy. LSEG Data & Analytics cites its own survey data showing that 90% of firms are already active in, or actively planning to expand into, private credit, confirming the asset class is no longer a niche pursuit.
But that growth brings a harder question: can firms manage information that is often less standardised, less liquid and less transparent than in public markets? LSEG Data & Analytics notes that instruments can be bespoke, information often flows through direct borrower relationships, fund managers or specialist vendors, and updates can be uneven. That leaves the burden of proof sitting heavily on the data architecture itself, raising the bar for what “good” looks like across investment, risk, valuation and compliance teams alike.
Covenant monitoring is one of the clearest examples of this challenge. Drawing on A-Team Group survey findings, LSEG Data & Analytics reports that 50% of firms rely on third-party data vendors to track covenants and performance metrics, 28% maintain direct borrower and issuer relationships to ingest raw statements and compliance certificates, and 22% use internal proprietary systems to parse credit agreements.
That fragmentation, LSEG Data & Analytics argues, makes consistency and defensibility harder to maintain, particularly given the tension between valuations supplied by general partners and the need for independent verification. A valuation, in this context, is not just a number but the product of inputs, assumptions, judgement and governance, meaning firms must be able to show how a view was reached and where independent challenge was applied. LSEG Data & Analytics also flags concentration risk as a quieter danger, warning that over-reliance on a single vendor, workflow or reporting channel can undermine the foundation supporting valuation confidence.
Metadata and governance sit at the heart of the solution, LSEG Data & Analytics suggests. Connecting borrowers, covenants, facilities, sectors, risk attributes and valuation events through a structured metadata layer reduces dependency on manual interpretation and institutional memory, making information more discoverable and comparable. Artificial intelligence has a role to play in navigating covenant language and borrower financials, but LSEG Data & Analytics is clear that AI cannot substitute for governance: human oversight remains essential where information is opaque and valuations are judgement-based.
Ultimately, LSEG Data & Analytics concludes that the next phase of private credit growth will favour firms that treat data infrastructure as core investment capability, built on resilient sourcing, clear data lineage and repeatable valuation governance.
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