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Risks
1. Credit Risk: PennantPark Investment Corp.’s investment strategies involve lending money to lower-rated companies, so there is an increased risk of these investments defaulting on their debt service payments.
2. Interest Rate Risk: PennantPark Investment Corp’s investments involve a significant exposure to interest rate risk meaning that changes in interest rates can significantly impact the value of their investments.
3. Market Risk: PennantPark Investment Corp’s investments can be affected by changes in the overall market conditions. If a recession were to occur, for example, it may lead to a decrease in the value of their investments.
4. Liquidity Risk: PennantPark Investment Corp’s investments may not always be able to be sold quickly on the open market and therefore there may be a close reliance on the receipt of payments from their borrowers to pay out redemptions to their investors. This lack of liquidity could mean that investors have difficulty accessing and withdrawing funds from their investments.