How to build TRUST in a jittery credit environment

Is the private credit ‘bubble’ about to burst? Are downgrades and defaults about to dominate the headlines? Or are we simply in the midst of a cyclical hiccup? I’m not here to predict what’s going to happen next but what I do know is that, historically, the best business opportunities for credit managers come when the headlines are the darkest and yields the juiciest.

The managers who will be best positioned to both retain clients through periods of adversity and capture an outsized share future flows will be those who build TRUST during periods of market uncertainty.

When you put yourself in the seat of your clients or LPs it’s easy to see how they could be a bit ‘unsettled’ (is that an understatement?) by what they’ve been seeing in the news. And that’s true whether they are an individual planning for retirement (or in retirement) or an individual representing an institutional pool of assets and thinking about their career. A sample of what they’ve been seeing:

• The unfolding ‘Saaspocalypse’ has gained momentum in 2026 leading to credit troubles in the software sector.

• Accelerating redemption requests leading to (seemingly responsible) gating of funds.

• Moody’s downgrades FS KKR Capital Corp BDC to junk.

In moments such as this, the absolute best thing managers can do – whether they are in the crosshairs or not – is to meet clients in the uncomfortable place where they are – and use this opportunity to build their TRUST in your mutual relationship.

Building TRUST is honestly not all that difficult. All it takes is a willingness to be open, honest and authentic as you, together, navigate periods of uncertainty. Here is a set of five principles that I’ve used to successfully build TRUST when client commitment might seem at its most vulnerable:

T - Take the time to explain

Managers who build trust:

• Walk clients through positioning, not just outcomes

• Explain what’s changing – and what isn’t

• Translate portfolio mechanics into client-relevant implications

Taking the time to explain is an investment in future conviction.

R - Resist hubris

Trust grows when managers:

• Acknowledge uncertainty rather than obscure it

• Avoid over-attributing past success to skill alone

• Demonstrate humility in the face of shifting regimes

Clients trust managers who respect the market’s ability to surprise.

U - Understand incentives

The best managers:

• Clarify the role credit and their shared mandate plays in the client’s broader portfolio

• Respect liquidity, governance and drawdown sensitivity

• Frame decisions through the client’s risk reality – not the manager’s

Understanding precedes alignment – and alignment precedes allocation.

S - Stay engaged

Trust is reinforced when managers:

• Increase communication during volatility

• Address discomfort directly instead of waiting for performance to recover

• Maintain message discipline across client, investment and leadership teams

Presence during stress is recalled long after performance normalizes.

T - Transparency builds Trust

Transparent managers:

• Share downside scenarios before they occur

• Clarify trade-offs instead of selling certainty

• Let credibility accumulate over time

Transparency is the currency that converts stress into opportunity.

Managers who explain clearly, stay humble and remain present during periods of stress are the ones clients stand beside – and fund – when opportunity finally reappears.