When investors and market observers thought about private capital pre-Covid, the persistent view was too much capital was chasing too few deals. This transaction inflation resulted in issuer-friendly trends, including compressed spreads, higher leverage and weakened terms.

When Covid hit, for a moment this balance shifted dramatically in favor of the investor. Deal supply dried up, lenders retreated, and terms – for the few borrowers – gapped out. Alas, within weeks central bank hyper-liquidity ended that run.

Today the pre-Covid trend has if anything accelerated. The fuel is a combination of close-to-zero risk free rates, not much higher yield for riskier public credit, and unnerving volatility from more correlated strategies such as public equities...

“The bumper sticker would say, we’re past the V.” – Michael Gapen, chief US economist, Barclays, on the recovery.

Featuring Charts

Chart of the Week: Ships Ahoy!

September 22, 2021

Container ships in the US queue are up significantly since the summer.

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Chart of the Week: Labor Pains

September 16, 2021

Higher earnings is being driven by pent-up worker demand; a 4.3% increase over last year.

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Chart of the Week: Higher, but Longer?

September 8, 2021

Growth in the US has slowed, while prices are on the upswing…but for how long?

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Chart of the Week: One-Stop Pop

August 19, 2021

Unitranche share of 2Q middle market sponsored loans slipped from 1Q, while overall activity jumped.

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Chart of the Week: Tranche Launch

August 12, 2021

An armada of large unitranche financings have sailed into the direct lending market this year.

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Chart of the Week: Mega Billions

August 5, 2021

Volume for unitranche financings slumped at Covid’s onset, but quickly recovered.

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Features

PDI Picks – 9/20/2021

Europe is also heating up It’s not just the US seeing transaction activity hit the heights. The leveraged buyout market is helping to create a boom in Europe, too. In last week’s edition of Lead Left, we reflected in this column on the “white hot” US deals market. In Europe, it’s a similar story, with

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Leveraged Loan Insight & Analysis – 9/13/2021

Unitranches continue to grow in size and scale The size and depth of the direct lending market has grown dramatically in recent years, with mega unitranches increasing in frequency. These larger deals have helped private lenders take market share from the broadly syndicated market and highlighted their growing scale. Back in 2019, there were 13

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The Pulse of Private Equity – 9/13/2021

Another frenetic quarter for the middle market Download PitchBook’s Report here. PitchBook’s latest US Middle Market Report was released today. The frenetic pace of dealmaking continued into the second quarter, reaching an estimated $142.8 billion. That would mark the second highest quarterly total on record, behind Q4 2020’s $156.8 billion. Sandwiched between those two was a

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Private Debt Intelligence – 9/13/2021

Dry powder levels indicate healthy competition in PD Levels of dry powder in private debt have reached 35% across five main strategies (direct lending, distressed debt, mezzanine, special situations and venture debt) in Q2 2021, with funds sitting on $364bn. This indicates that, based on a three-year fundraising cycle, capital raised is in balance with

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PDI Picks – 9/13/2021

Reinforcements needed for deals frontline Private debt transactions are plentiful, but are European fund managers biting off more than they can chew? In last week’s Lead Left, we reflected on our US Report, which accompanied the September 2021 issue of Private Debt Investor, in which Paul Hastings partner William Brady told us that the market

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Middle Market Deal Terms at a Glance

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Special Report: The State of Private Credit in Europe

September 7, 2021

Beginning in June 2021 The Lead Left published a series of articles on the state of private credit in Europe. This report consolidates those articles.

2H 2021 Midyear Outlook Report

July 29, 2021

Economic and Market Overview Broadly Syndicated Market-Observations A View on Private Credit Login to view interactive report and download PDF version. ...

Special Report: 2020 – A Year of Surprises

June 17, 2021

Beginning in January 2021 The Lead Left published a series of articles on the five biggest private capital surprises of 2020. This report consolidates those articles.