The stresses of COVID-19 brought challenges to private credit as much as to other assets. For insurers, concerns about the illiquid nature of the private credit asset class were particularly resonant. Barings showed its strengths in this time.

Initially it had avoided stressed sectors, including restaurants and retail due to their vulnerability to disruption over the life cycle of a typical investment.

However, screening for industry exposure did not necessarily ease all the concerns at play, given the scale of the pandemic. To reassure investors, Barings instituted a six- weekly qualitative and quantitative portfolio update, focused on the direct impact COVID-19 was having on each of its underlying portfolio companies – no small feat given the scale of its investments.

On a broader scale, Barings' North American Private Loan Fund has shown its risk controls in the asset class – something that is invaluable for insurance investors. Unlike many investors who might look to fill up their portfolios as quickly as possible based on high potential yields, Barings view the concept through a slightly different lens, given it is investing alongside its funds in every deal it does.

"This has allowed us to think about total return generation in a different light: we have worked with our bank partners to structure leverage facilities that effectively reward us when we take less risk at the deal level, by ascribing higher advance rates on those loans within the leverage facility," said Ian Fowler, Barings co-head of global private finance.

"The impact of this concept is that it allows Barings to do more conservative, through-the-cycle transactions at the deal level, but achieve better terms and conditions on the fund-level leverage."