When discussing some of the seismic events, such as the global financial crisis, that have shaped his long career in finance, George Muzinich cites the economic standstill caused by the Covid-19 pandemic as the most unusual.
“Covid was the first time in human history that the economy just stopped,” the 81-year old says. “When you convert from peacetime to wartime, you still produce things—tanks instead of furniture, for example—but during Covid, production ceased altogether, albeit temporarily.”
This unprecedented halt in global economic activity caught everyone off guard. “We had developed new strategies, and all of a sudden, we were stopped in our tracks,” he says.
The challenges of the pandemic were not just about the lack of productivity, but also the fear and uncertainty that gripped investors and businesses alike.
“It was almost as if people were putting money under the bed, trying to protect themselves,” he recalls, referring to the hesitancy in making new investments. “It was a period where people pressed the pause button on a lot of things.”
Despite the challenging environment, Muzinich’s firm managed to stay the course. “We consider ours to be a very dynamic, growth-oriented business,” he says. Even during the pandemic, while new strategies were difficult to introduce, certain areas like housing outside cities saw growth. “You could get very cheap financing during that time,” he adds, highlighting how some sectors still thrived.
Stability Amidst Market Shocks
Muzinich & Co. has weathered several financial storms over the decades. Established in 1988 as a fixed income specialist after the junk bond crisis of the late eighties, the firm’s founding principle was clear: invest in good businesses that can survive periods of economic contraction.
“The genesis of the firm was in a period when everyone wanted to get out of high yield bonds. The market collapsed,” Muzinich recalls. “But we believed that some businesses were solid and that value could still be created, even in a stressed environment.”
This philosophy of focusing on quality, well-researched investments has been the backbone of the firm’s approach for almost four decades.
Muzinich emphasizes the importance of “extracting return per unit of risk,” a mantra that has driven the company’s growth without “style drift” over the years. Today, the firm manages almost US$37.6 billion in assets, all focused on corporate credit, with $32.2 billion in public markets and $5.4 billion in private debt, including direct lending, parallel lending, capital solutions and aviation finance.
Even in the face of global disruptions, the firm’s conservative, research-driven approach to credit investing remained unchanged.
“We’re very focused on understanding risk and protecting capital,” Muzinich notes. “And one of the best ways to reduce risk is to diversify.”
Adapting to a Changing Banking Landscape
The role of banks in corporate lending has evolved dramatically, and Muzinich is keenly aware of the opportunities this has created. “Banks are increasingly asset-light, focusing more on services and less on traditional lending,” he explains. This shift has allowed private credit firms like Muzinich & Co. to step in, particularly in lending to mid-sized businesses, a segment that banks have become less inclined to serve.
“We focus on cash flow lending, which offers much greater flexibility than traditional banks,” says Muzinich. This focus on cash flow as well as collateral gives his firm the ability to provide financing to businesses with good fundamentals, even if they don’t have extensive physical assets. This approach has become particularly important in recent years as more companies seek alternatives to traditional bank loans.
Private credit – now one of the fastest growing areas of finance – has been a core area of growth for Muzinich & Co., with the firm expanding its offerings to include aviation finance, collateralised loan obligations, Asia private debt and parallel lending, a relatively new and conservative type of lending strategy where the firm co-invests on equal terms with banks.
In September 2023, the firm launched its evergreen MLoan strategy, blending its capabilities in parallel lending, direct lending and syndicated loans. The firm also offers capital solutions for companies facing temporary stress.
“We only lend to good businesses that have stumbled, whether due to a bad acquisition or over-leveraging,” he explains. The firm’s Capital Solutions strategy, which invests in a range of situations from rescue financing to deleveraging transactions, has found particular success in Italy, with plans to expand further across Europe.
Expanding Geographical Reach: Asia and the Middle East
In recent years, Muzinich & Co. has extended its reach into new regions, notably in Asia, with the Middle East another area of growing focus. “We’ve seen enormous wealth creation in APAC,” Muzinich says.
Over the past five years the firm has opened new offices in Tokyo, Hong Kong and Sydney as part of an expansion drive. In the last year alone, it has signed new distribution agreements with leading local financial institutions across Europe, Asia, North America and the Middle East and brought in senior distribution personnel in Germany, Switzerland, France and the Nordics.
“Europe has been hugely important to us from the very start and continues to be so, while Asia and the Middle East are incredibly exciting growth areas,” Muzinich says. “There’s a tremendous amount of opportunity in these regions, and we’re committed to being a part of that growth.”
In Latin America, the firm has also seen steady growth, largely through partnerships with third parties. “We’ve even moved some Spanish speakers to Miami to focus on developing our offshore business,” he says. With such a wide geographical footprint, the firm now has 15 offices globally, including two in the United States, nine in Europe, and four in the Asia-Pacific region.
The Future of Credit and Corporate Bonds
After a prolonged period of near-zero rates that characterised the post-financial crisis period, Muzinich believes the credit market is returning to a sense of normalcy.
“Negative or flat rates are an aberration,” he says. The return of positive real rates is, in his view, a “relief,” as it creates a more stable environment for fixed-income investments.
However, the rapid pace at which rates increased in 2022 and 2023 to combat inflation caused significant market turmoil. “There was a lot of Pollyanna-ish thinking about inflation,” he says, referring to overly optimistic forecasts. “We believe inflationary pressures could persist longer than some expect, and that’s something we’re helping our clients navigate.”
Muzinich remains optimistic about the future of corporate credit, particularly as a source of diversification and income in a world where equity valuations look stretched. The firm has launched several new products in the past 12 months, including a market-duration investment-grade fund and its flagship parallel lending strategy, MLoan.
Its most recent launch, announced in September 2024, marks its first foray into the real assets debt market. On the strategy, it is working in partnership with Orion3, a Hong Kong-based investment firm backed by the CK Asset Holdings conglomerate (founded by Li Ka-shing).
“There’s something beautiful about getting regular income, whether it’s every three months or six months,” Muzinich says. “We’re focused on how to compound interest effectively while protecting capital.”
Legacy of Prudence and Growth
When asked about the firm’s growth since its inception, Muzinich is quick to emphasize that the core philosophy remains unchanged. “We’ve had no style drift,” he says proudly. “We’re still conservative, prudent investors, always focused on protecting capital and delivering real returns.”
His son, Justin Muzinich, 46, was appointed CEO of the firm in early 2022, following a 2-year stint as U.S. Deputy Secretary of the Treasury.
While George remains Executive Chairman, the transition marks a new chapter for the company. “Justin brings a fresh perspective, and together we’re continuing to build on the firm’s legacy,” George says.
“The world is divided into two parts: in public markets, you need scale. In private markets, it’s about focusing on quality, good businesses, and being flexible. But the philosophy is the same—understand risk, protect capital, and create value.”
“We’re partners with our clients in good times and bad,” Muzinich concludes. “That’s what matters most.”
KEY DATA Muzinich & Co
Employees – 260
Offices -15 (2 in US, 9 in Europe, 4 in APAC)
AUM – US$37.6 billion (100% corporate credit)
Public markets
Investment grade $15.4bn
High-yield $8.3bn
Multi-asset and absolute return credit – $3.7bn
Syndicated loans – $3.7bn
Emerging market corporates – $1.1bn
Private markets
Private debt (direct lending, capital solutions, parallel lending) – $4.6bn
Aviation finance – $700m
Recent milestones
Five new offices opened over past five years – Geneva, Sydney, Tokyo, Hong Kong, Florida
2019 – launched first European Long-Term Investment Fund (Eltif)
2020 – established aviation finance business
2020 – expansion of private debt business into Asia Pacific
2021 – established Collateralised Loan Obligation (CLO) business
2021 – launch of parallel lending strategy (a relatively new form of private debt where asset managers partner with banks and seen as lower risk than traditional private debt)
2021 – launch of capital solutions strategy, which lends money to companies in temporary stress (as opposed to distressed)
2022 – Justin Muzinich appointed CEO of Muzinich and George becomes Executive Chairman
2023 – Launch of MLoan – a semi-liquid, evergreen fund that is the firm’s flagship parallel lending strategy
2024 – Second capital solutions strategy launched in partnership with Azimut (Italian financial services company)
2024 – Launch of new market duration investment-grade fund and fixed maturity bond funds
2024 – Launch of new real assets and infrastructure private debt strategy in partnership with Orion3
