Clearwater Analytics Report Challenges Private Credit Contagion Narrative — Clearwater Analytics Holdings, Inc.

Event summary

Clearwater Analytics released its first comprehensive study on private credit, analyzing $10 trillion in institutional assets across 60 asset classes.
The report found median insurer allocations to private credit grew 110% since 2021, reaching 9% of total portfolio assets.
Corporate treasurers' median allocation climbed to 2%, up from negligible holdings a few years ago.
Clearwater identified 'cross-contamination risk' as the primary concern, with idiosyncratic risks concentrated on individual balance sheets.

The big picture

Clearwater's report highlights the growing prominence of private credit in institutional portfolios, challenging the narrative of systemic contagion. The asset class has gained significant ground, with insurers and corporate treasurers increasing allocations substantially. Clearwater's platform provides the necessary infrastructure to manage idiosyncratic risks, positioning investors to turn risk into a competitive advantage.

What we're watching

Infrastructure Gap: How Clearwater's technology will address the operational and analytical infrastructure needed to manage private credit exposures.
Regulatory Treatment: Whether liability structure and regulatory treatment will continue shaping institutional allocations to private credit.
Performance Data: The pace at which performance data will drive further adoption of private credit in institutional portfolios.