Private credit’s evolution from a niche allocation to a $2 trillion global market has brought both opportunities and challenges. Investors and allocators are asking where alpha still exists, how strategies behave under stress, and which risks matter most today. A panel of private credit investors at Commonfund Forum 2026, moderated by Commonfund OCIO Director, Olga Chiriac, spanned market segments: opportunistic credit, global aviation leasing, and residential real estate lending. The panel acknowledged the challenges and focused on concrete examples of where the next decade of private credit returns may come from, painting a picture of resilience driven by diversification.
The Search for Alpha: Specialization Over Scale
A dominant theme across the discussion was that alpha today can be found in more complex, less crowded, and structurally inefficient markets. This contrasts with the scaled middle market where news of liquidity mismatches and sector concentration have been the recent focus.
Alexis Atteslis, Co-Head of Europe & Partner, Oak Hill Advisors, described Europe as a landscape defined by fragmentation—multiple legal regimes, banking systems, and borrower types that “don’t really have access to capital markets… not big enough, not sophisticated.” This creates a persistent funding gap that banks, constrained by regulations, cannot fill. Alpha in this environment comes from bespoke capital solutions and proprietary origination that outsiders cannot easily replicate.
Matthew Crawford, Co-Chief Investment Officer, SKY Leasing, highlighted a different but equally specialized ecosystem: global aviation finance. Aircraft leasing is anchored in physical assets, long duration cash flows, and a supply chain dominated by two main companies. These structural features create scarcity and high barriers to entry, a benefit for the firm that has decades long airline and manufacturer relationships.
Padraig (Paddy) Moore, Senior Portfolio Manager and Co-head of Europe Strategy, Avenue Capital Group, emphasized that Europe’s chronic housing shortage, combined with banks’ retreat from construction finance, has created a durable opportunity for short term, senior secured real estate lending. The alpha here is rooted in market access: a vast origination platform sourcing mid sized homebuilder financing for loans that banks won’t finance due to regulatory capital constraints.
Performance Under Stress: What Happens When the Cycle Turns?
When asked how their strategies behave under real stress, the panelists pointed to track records that reflect resilience. In sum:
Aviation faced one of the most severe shocks in modern history during COVID, yet aircraft values and long term leases held up. As Matt noted, “assets have held up … long term lease cash flows performed,” even as airlines faced systemic disruptions. The sector’s supply shortages and production limitations continue to support asset values today.
European opportunistic credit, by contrast, often benefits from stress. Alexis explained that refinancing pressure driven by changes in interest rates, especially in over levered capital structures, is creating a wave of opportunity for private solutions. Because these borrowers may lack access to capital markets, their financing needs persist regardless of macro volatility.
Meanwhile, residential real estate lending in Europe is insulated by its short duration. Loans typically resolve within 18-24 months, limiting exposure to long term macro cycles. Homes “always get built… and they get sold,” Paddy noted, thanks to significant structural undersupply, improving affordability in some locations, and government incentives.
These strategies are anchored in real assets, structural imbalances, or essential economic needs, making them more resilient when cycles turn. Rather than broad macro shocks, the panelists agreed that the biggest risks are idiosyncratic, and require conservative loan to value ratios, and jurisdiction specific due diligence and expertise to mitigate potential downside. In other words, the speakers’ top-of-mind risks are related to underwriting the wrong borrower rather than the macro backdrop.
The Future of Private Credit Belongs to Specialists
The panel made one point clear: the most compelling opportunities in private credit today lie outside the crowded middle market core. They exist in markets with structural inefficiencies, real asset collateral, and high barriers to entry. Whether through European bespoke lending, global aircraft leasing, or short duration real estate finance, the next wave of alpha will come from specialization rather than scale, with strategies built to withstand real world stress.
