About the Client
A U.S.-based, mid-sized asset management firm was building a new allocation to emerging-market private credit. They had internal research and a shortlist of potential managers, but lacked confidence around on-the-ground underwriting practices, borrower quality, and local operational risks. They hired Nexus to provide rapid, manager-focused market intelligence so they could make one or more initial commitments.
The Challenge
Opaque manager track records
Many prospective managers had limited public history and tightly held deal-level information, making it hard to judge true credit performance.
Local execution & regulatory risk
Country-by-country differences in enforcement, FX rules, and court outcomes made it difficult to model downside scenarios.
Time pressure
The client needed decision-ready insight quickly to meet a board window and to avoid losing priority on several deals.
Our Approach
Precision sourcing & screening
We screened ~40 candidates and recruited a focused panel of 20+ experts: former GP partners, regional credit officers at banks, CFOs of mid-market borrowers, local counsel, and international allocators who had evaluated the same managers.
Structured, manager-led interviews
Each call followed a templated guide (origination, covenants, default handling, FX hedging, servicing) plus manager-specific probes the client provided.
Reference & counterparty checks
For the top managers the client was considering, we ran targeted reference checks with former LPs and borrowers to validate claims on sourcing and recoveries.
Synthesis and benchmarking
We produced a short insight deck and a risk “heatmap” per manager (governance, asset quality, pricing power, enforceability), plus explicit model adjustments (e.g., recommended LGD and seasoning assumptions) the client could plug directly into their underwriting model.
Results & Impact
Delivered in three weeks, the engagement gave the client clear, decision-ready intelligence:
- 20+ expert interviews completed (manager-level reference checks included).
- Shortlisted 4 managers as high-conviction opportunities and removed 2 managers where interviewees flagged structural conflicts and weak recovery playbooks.
- Concrete model changes recommended (e.g., increase expected loss assumptions by ~1.5 percentage points for certain jurisdictions), which the client used to reprice offers and stress tests.
- Operational wins: the client avoided a likely problem investment (saving an estimated $1–2M in near-term legal and diligence fees) and moved forward to commit to their first EM private credit allocation with renewed confidence.
- Time saved: our outreach and synthesis saved the internal team an estimated 80+ hours of screening and cut their decision timeline by roughly 30%.
The client called the work “practical, direct, and exactly what we needed” and has since retained Nexus for manager monitoring and follow-up diligence for future allocations.
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