What Inning Are We In? (First of a Series)

That’s the perennial question that leading direct lenders addressed last week on a panel moderated by your correspondent at the 25th Annual Atlantic Conferences Middle Market Symposium. As the event was technically closed to the press, we can’t report on what was discussed. Instead, let’s cover the broad themes confronting market observers as they focus on where we are in the business cycle.

The “inning” metaphor is well-worn. We came across a media report forecasting the US is in the “final innings of economic growth.” That came out over two years ago (http://www.businessinsider.com/us-is-final-innings-of-economic-growth-2016-3).

We know the exuberance of the current leveraged loan market dates back to at least 2014. That’s when debt/ebitda levels started feeling toppy again. “This should last for a couple more innings,” investors told themselves, and modeled in a downturn for 2016 or 2017...

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Quote of the Week

“There’s this cloud of geopolitical uncertainty that’s overshadowing the fact that we have a fairly sturdy backdrop in the US.” – Emily Roland, head of capital markets research, John Hancock Investments.

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Lead Left Spotlight

Rod Rivera & David Baker

Managing Directors

Capstone Headwaters

"Value-based care is definitely the theme of the day."

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Andrew Welch

Managing Director

Revelstoke Capital Partners

"We believe scale matters, particularly in healthcare."

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Bram Smith & Lee Shaiman

Outgoing and Incoming Executive Director

LSTA

"Despite the financial crisis and a sharp pricing drop, loans and CLOs actually performed as promised."

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Upcoming Interview: Mark Habner

Co-Founder & CEO

BeckWay Group

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Upcoming Interview: Peter Magas

Managing Director

Beecken Petty O'Keefe & Company

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Features

Leveraged Loan Insight & Analysis – 5/21/2018

Oil & gas loan prices climb in tandem with higher oil prices Secondary market oil and gas loan prices have climbed 137 bps so far this year in tandem with higher oil prices that surprised, jumping almost $11 this year to $71.3 a barrel. Oil and gas loans have rebounded from the lows hit in

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The Pulse of Private Equity – 5/21/2018

PE’s massive consolidation in healthcare Download Report click here. Healthcare-related PE activity broke records last year. Both counts and value reached new highs in 2017, according to RSM’s Q1 Healthcare and Life Sciences Report, done in conjunction with PitchBook. In all, 692 transactions were done totaling $86.1 billion in North America....

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PDI Picks – 5/21/2018

Fewer managers collecting more of the capital  Private credit vehicles seeking capital fell from the record level reached in the first half of 2017. The number of private debt funds raising money has fallen slightly from a record number at the middle of last year but it remains strong; as of 31 March, there were

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Markit Recap – 5/21/2018

Has contagion returned to the eurozone? Bismarck said politics was the art of the possible. Holders of sovereign bonds issued by eurozone peripherals will be hoping this aphorism applies to Italy’s incoming government. A populist coalition formed of the anti-establishment Five Star Movement and the right-wing League, which looks set to form a government, seemed

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Private Debt Intelligence – 5/21/2018

Women Account for Less than a Fifth of Private Debt Employees The lack of female representation in alternative assets has come under increasing scrutiny in recent years, as women account for less than a fifth of employees in firms across all alternative asset classes. When looking at the representation of women in different levels seniority,

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