day I will provide you with an update on the Coller platform, Coller Credit RIC highlights, and lastly, a brief assessment of the credit secondaries market opportunity.
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There are really three key points I’d like you to take away from today’s update. First, the Coller Credit RIC portfolio remains healthy with strong overall performance. Second, the portfolio is highly diversified. And third, the current dislocation in the credit market continues to present attractive investment opportunities for us as a secondaries 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. We have a rich 35-year history in secondaries and pride ourselves on having a local presence 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 have made seven partner and seven managing director promotions across our investment and operation teams.
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We also take pride in our dedicated credit team, which now comprises over20 team members. Our credit investment partners have been investing together for over 15 years. 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 secondaries deals, and around75 credit investment completed since inception.
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As you’ll 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 the Coller Credit RIC as at the end of March. The fund has delivered returns of 8.75% on a cumulative basis since inception.
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In the quarter, the fund returned 2.06%, driven by portfolio growth and discount capture. The fund size has grown to $511 million with 17 deals completed to date.
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The portfolio continues to diversify with investment into 34 managers across 70 different underlying funds. Within the funds, we have investment in 1,660 borrowers and circa 3,440 underlying assets.
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We believe that this level of diversity is a key benefit of credit secondaries. We have 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 Coller Credit RIC portfolio.
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As seen in the bottom left-hand chart, we’ve constructed a portfolio that is performing well with 65% invested in direct lending senior credit investments, 27% in opportunistic credit, with a remainder allocated across junior capital, preferred, and structured credit.
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Looking at the top left-hand side, you can see Coller Credit RIC is invested into high-quality blue-chip GPs. Names like Ares, StepStone, and TPG. These are managers that 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 a differentiated access to opportunities like these. Now, digging a level deeper, 91% of loans in the portfolio are floating rate with an average spread of 7.1%.
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This is wider than you see in today’s direct lending market, as we have purchased loans from older vintages.
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Now looking at the underlying borrowers themselves, the fund is invested primarily in larger businesses with a median net debt to EBITDA of 5.2 times. The portfolio is largely invested in North America and has diverse industry exposure with healthcare, industrials, and information technology being the largest sectors.
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Looking now to value drivers and realizations. Since inception, the portfolio has performed well.
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81% of the portfolio value has been driven by discount capture, while 19% by portfolio growth, and we expect that percentage to grow as the fund matures. Looking at Q1, the growth portfolio returned circa 2.7%.
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During Q1 2026, we completed two new investments across a mix of large-scale diversified portfolios and high-conviction opportunities, primarily focused on senior direct lending.
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Let me now highlight our largest investments made in Q1 2026.
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Condor was the largest investment at $169 million. This was an LP-led opportunity to secure a diversified portfolio of credit LP positions and SMAs. The portfolio provides look-through exposure spanning over 800 unique borrowers with limited concentration with around 85% in first lien or unitran positions.
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Coller’s prior relationship with the GP enabled differentiated access and enhanced due diligence.
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The transaction is closing over numerous tranches, of which the first tranche funded in March. Neptune was a $77 million GP-led transaction for a 2018 vintage US direct lending fund held alongside Ares.
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As lead investor, Coller negotiated favorable terms, including discounted lead economics. Overall, we’re really happy with the investments made in the Coller Credit RIC portfolio to date.
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The fund is well-positioned to capitalize on the current market opportunity. There are four themes shaping the credit investment 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. 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 systematic 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. This is the theme generating the most noise right now, redemption pressure, primarily from the wealth channel.
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It is real, and it is being amplified by media sentiment. But the key distinction is this, the pressure is at the vehicle level, not the asset level. And this is precisely what creates opportunity for us as secondary buyers. And I’ll come back to that in a moment.
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AI’s potential impact on software and technology businesses is a legitimate question, and one we take seriously.
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We believe our portfolios are highly diversified with a remaining duration of 1.8 years, and over 98% of our credit investments in software are cash flow positive. 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 now turn to one of the most interesting pockets of the opportunity in the market today, BDCs, and why it is directly relevant for collar credit risk.
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We are seeing significant redemption pressure across private BDCs and meaningful share price deterioration in public BDCs. Redemptions 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, 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 asset 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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We’re already seeing this translate into transactions with some interesting opportunities. For collar credit risk investors, this is the environment the fund was built for.
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With this, I will conclude our Q1 ’26 quarterly update. To summarize, the three key takeaways remain consistent.
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The collar credit risk portfolio is senior and performing strongly. 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 secondaries investors at a discount.
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Thank you, and as always, please feel free to reach out to the team at cc.privatewealth@collarcapital.com with any questions. Thank you.
