“The easy money has been made; the harder money is left.”
We noted this recently from an experienced asset manager reflecting on the current investing market. It’s fairly typical of a public trading approach emerging from a period of low prices. Eventually the worry discount goes away as fear fades. Finding the next bargain is a challenge.
So where’s the value in private credit to be found? As the Great Moderation in the economy, rates, and inflation ends and we enter a new era – the Great Unwind – of higher volatility, higher rates, and reduced globalization, how will that impact less liquid assets?
As our Chart of the Week shows, the thirty-year-plus cycle of decreasing interest rates is over...
Quote of the Week
“Getting in the direction of not tightening enough has much bigger consequences than the other way around.” – John Roberts, former deputy associate director, Federal Reserve.
Featuring Charts
Chart of the Week: Headed Up?
The 30-Year US Treasury index has been on a down slide for over three decades…so far.
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Chart of the Week: Honey, I Shrunk the Fed
Quantitative tightening is expected to reduce the Fed’s balance sheet by $2 trillion.
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Chart of the Week: Welcome to the Precession!
Not since 1969 have there been two milder consecutive negative growth quarters.
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Chart of the Week: Misleading Indicator?
The Conference Board index of ten leading indicators points to only a modestly slowing economy.
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Chart of the Week: Off the SOFR
Forward expectations for loan benchmark rates are peaking in early 2023.
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Chart of the Week: Spreads Move, Premium Persists
The illiquidity premium for middle market loans is a staple regardless of how spreads change.
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Features
Leveraged Loan Insight & Analysis – 8/8/2022
BDC loan valuations shift lower in recent filings The fair value of BDC debt investments declined in 2Q22, driven by credit spread widening across the broader markets as volatility spiked against a backdrop of inflationary pressures and recession fears. Looking at the cohort of 56 BDCs that have posted earnings as of August 10, the…
View ArticleThe Pulse of Private Equity – 8/8/2022
Midyear grading Download PitchBook’s Report here. Every December, PitchBook makes a slew of predictions about industry trends in the upcoming year. That’s been a tricky gambit since 2019. In successive years, the industry has navigated a global pandemic, a skyscraper of a recovery, and a slowdown driven by unavoidable macro trends. Last December, the prevailing mood…
View ArticlePrivate Debt Intelligence – 8/8/2022
Private debt fundraising in North America on track for record The number of private debt funds in North America has yet to reach pandemic or pre-pandemic levels, but the trend of mega funds continues. In 2022 year to date, 55 private debt funds closed in North America. Even if that number doubles in the next…
View ArticlePDI Picks – 8/8/2022
Fundraising hits a new low Raising capital in the first half of this year was even tougher than at the height of the pandemic, but fund sizes are at all-time highs. First-half fundraising among private debt funds in 2022 is the lowest it has been in our sample at $91.9 billion, even slightly lower than…
View ArticleLeveraged Loan Insight & Analysis – 8/1/2022
The healthcare sector led sponsored MM lending in 1H22 Overall sponsored middle market lending activity (comprised of both direct lending and syndicated volume) was robust again in 2Q22, climbing 42% to US$44bn. The healthcare, business services and technology sectors remained in the top 3 spots in the most recent quarter, cementing their lead in the…
View ArticleMiddle Market Deal Terms at a Glance
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Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Login to Read More...
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
Beginning in March 2021 The Lead Left published a series of articles on reflation and inflation. This report consolidates those articles.
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