The fund management industry has flocked to the direct lending space in the wake of rules introduced since the financial crisis, which have made it less attractive for banks to loan to businesses to the same degree they once did.
Shadow banking has come under increased scrutiny in recent years amid fears such activities pose risks to financial stability. Mr Redmond played down concerns about the risks investors face from direct lending and other forms of illiquid credit strategies.
Assets in the direct lending industry have more than tripled since 2006 to $441bn by the end of last year, according to figures from Brown Brothers Harriman, the financial services group, and Preqin.
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