Michael Schad, Head of Coller Credit Secondaries.
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Today, I will provide you with an update on the Coller platform, CollerCredit highlights, and lastly, a brief assessment of the credit secondaries market opportunity.
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There are three key points I’d like you to take away from today’s update.
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First, the CollerCredit portfolio remains healthy. Second, the portfolio is highly diversified. And third, the current dislocation in the credit market continues to present potentially attractive investment opportunities for us as a secondary investor.
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Let me start with an update on our platform.
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With around $54 billion of asset under management, Coller Capital is one of the largest and longest-standing investors focused exclusively on the global secondaries market.
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We have a rich 35-year history in secondaries and pride ourselves on having a local presence, currently with 326 employees across 12 offices worldwide.
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On personnel, we are pleased to announce a number of changes as the platform continues to grow. We’ve made seven partner and seven managing director promotions across our investment and operations teams.
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One of Coller’s key differentiators is our large, dedicated investment team with 75 investment professionals. Our sizable investment capability is a strong competitive advantage as it allows us to generate a strong deal flow, embrace complexity in transactions, and remain highly selective in an increasingly competitive market.
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We also take pride in our dedicated credit team, which now comprises over 20 team members. Our credit investment partners have been investing together for over 15 years.
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We are one of the most established players in credit secondaries globally, with 17 years of credit investing at Coller, approximately $11 billion deployed into credit secondary deals, and around 75 credit investments completed since inception.
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As you will have heard previously, our combination with EQT remains on track. The transaction is expected to close in the second half of this year, and Coller’s investment team, investment committees, and decision-making will remain fully independent post-close.
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Let’s now look at the status of CollerCredit as at the end of March. The fund has delivered strong returns since inception, with 17.03% cumulative and 11.05% annualised returns, and a 7.32% return over the past 12 months.
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For those of you within our Canadian or Australian feeder funds, please refer to our relevant fact sheet for specific share class information.
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In the quarter, the fund returned 1.99%, driven by portfolio growth and discount capture. The fund’s size has grown to $811 million, with 36 deals completed to date.
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The portfolio continues to diversify with investments into 91 managers across 201 different underlying funds. Within the funds, we have investment in 3,900 borrowers and10,550 underlying assets.
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We believe this level of diversity is a key benefit of credit secondaries, with the average company exposure being only 0.03% of the fund.
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We’ve continued to take a disciplined approach to portfolio construction, prioritizing high credit quality and strong forward returns.
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Let’s now dig deeper into the CollerCredit portfolio.
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As seen in the bottom left-hand chart, we’ve constructed a portfolio focused on performing credit with 85% in direct lending senior credit investments, with the remainder allocated across more junior and opportunistic strategies.
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Looking at the top left-hand side, you can see CollerCredit is invested into high-quality blue-chip GPs. Names like StepStone, TPG, and Ares.
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These are managers we know well and in many cases, have partnered with us across multiple transactions.
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Our ability to underwrite quickly and with conviction, backed by deep, long-standing relationships, is what gives us differentiated access to opportunities like these.
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Digging a level deeper, 91% of loans in the portfolio are floating rate with an average spread of 6.8%. This is wider than you see in today’s direct lending market, as we have purchased loans from older vintages.
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These loans have an average maturity of 2.2 years, with a much earlier maturity wall than the direct lending market. Our exposure to mature loans helps generate a high distribution pace, which currently stands between 25% to 30% per annum.
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Looking at the underlying borrowers themselves, the fund is invested primarily in larger businesses with an average issuer EBITDA of $107 million and medium net debt to EBITDA of 5.1 times.
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The portfolio is largely invested in North America and has diverse industry exposure, with information technology, healthcare, and industrials being the largest.
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Looking now to value drivers and realisations. Since inception, the growth portfolio has performed well, returning 18% on an annualised basis. Which is driven by the excess liquidity sleeve we were holding throughout the second half of last year.
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Over 50% of the portfolio value has been driven by growth of the existing portfolio, and we expect that percentage to grow as the fund matures.
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Looking at Q1, the gross portfolio returned 3.07%. When we look at realisations from the portfolio, we are pleased with the distribution pace of the fund to date.
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Our Q1 2026 distribution pace was 4%, with the annualised distribution pace for the 12 month ending 31st of March standing at 28%.
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Our largest realisations in Q1 2026 were Eagle, Tribune, Island, and Shore.
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During Q1 2026, we completed five new investments across a mix of large-scale diversified portfolios and high-conviction opportunities, primarily focused on senior direct lending.
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Now let me highlight two of our largest investments made in Q1 ’26.
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Condor was our largest investment at $169 million. This was an LP-led opportunity to acquire a diversified portfolio of credit LP positions and SMAs.
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The portfolio provides look-through exposure spanning 800 unique borrowers with limited concentration, with around 85% in first lien or unit trust positions.
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Coller’s prior relationship with the GP enabled differentiated access and enhanced due diligence, and we were able to shape the transaction by excluding two SMAs with material upcoming write-downs.
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The transaction is closing over numerous tranches, of which part was completed in March.
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Neptune was a $77 million GP-led transaction for a 2018 vintage US direct lending fund held by Ares. As lead investor, Coller negotiated favourable terms, including discounted lead economics.
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Overall, we are happy with the investments made in the CollerCredit portfolio to date. The fund is well-positioned to capitalise on the current market opportunity.
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There are four themes shaping the credit environment right now. I want to address each of them directly.
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You may have seen headlines about falling earnings across private credit. In reality, this has been driven by base rates declining and tighter spreads.
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BDC returns have been impacted by structural factors and not deteriorating credit quality.
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High-profile defaults attract attention, but the data tells a more measured story. Default rates remain broadly in line with historical averages, and there’s no evidence of systemic deterioration.
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What we are seeing in the press are idiosyncratic, company-specific situations, a natural feature of a larger, more mature market.
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Critically, in a portfolio as diversified as Coller Credit, the impact of any single credit event is dramatically muted. This is the theme generating the most noise right now, redemption pressure, primarily from the wealth channel.
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This is real, and it is being amplified by media sentiment. But the key distinction is this pressure is at the vehicle level, not the asset level.
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That is precisely what creates opportunity for us as secondary buyers, and I’ll come back to that in a moment. AI’s impact on software and technology businesses is a legitimate question and one that we take seriously. We believe our portfolios are highly diversified with a remaining duration of 2.2 years.
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And over 98% of our credit investments in software are cash flow positive.
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Short duration and diversification are powerful mitigants here, and the near-term impact on credit fundamentals is therefore limited.
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Against that backdrop, let me turn to one of the most interesting pockets of opportunity in the market today, BDCs, and why it is directly relevant for CollerCredit.
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We are seeing significant redemption pressure across private BDCs and meaningful share price deterioration in public BDCs.
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Redemption from private BDCs rose 2.8 times from Q3 to Q4 2025 and 2.5 times to Q1 2026.
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For public BDCs, the RJ BDC index declined approximately 15% to 17% over the same period.
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While the S&P 500 was up over 16%. This is overwhelmingly a technical dislocation driven by liquidity pressure, sentiment, and in some cases, credit concerns, rather than a broad fundamental deterioration.
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The underlying assets in many of these vehicles remain performing and of high quality. As redemption pressure builds, managers need liquidity, and that means assets will come to market.
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In some cases, investors who cannot wait through multiple redemption cycles will look to the secondary market directly.
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Either way, this creates the conditions for acquiring high-quality, performing loan portfolios at attractive discounts.
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We are already seeing this translate into transactions.
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Project Eagle 40, which I mentioned earlier, is a strong recent example. A performing senior-focused credit portfolio acquired at an attractive discount.
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Exactly the type of high-conviction opportunity our underwriting process is designed to identify and execute on.
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For CollerCredit investors, this is the environment that the fund was built for.
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With this, I will conclude our Q1 2026 quarterly update. To summarise, the three key takeaways remain consistent. The CollerCredit portfolio is senior and is performing. It is broadly and deliberately diversified, and the current dislocation in the private credit market, driven by redemption pressure and liquidity dynamics, continues to present a compelling buying opportunity for us as a secondary investor at a discount.
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Our conservative underwriting, disciplined portfolio construction, and long-standing GP relationships position us well to deliver a better risk-return profile than the primary credit market to you, our investors.
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Thank you, and as always, please feel free to reach out to the team at cc.privatewealth@Collercapital.com with any questions. Thank you.
