In this series we’ve reviewed market conditions for issuers as we wrap up 2Q and head into the second half of the year. Let’s conclude by looking at how investors view this environment and what questions and conclusions are arising.

As we’ve highlighted, there are headwinds and tailwinds in deal flow. Demand from managers who have raised significant dry powder is incessant. And for good reason: the uncertain rate and economic outlook is a major driver of investor appetite for private credit. With each month’s inflation data alternating between good (slowing activity) and bad (heating up), no one has a clue on the timing of rate cuts or likelihood of a soft landing.

This lack of visibility on market direction has combined with private credit’s performance and yield stability over time to convince many investors that alternatives generally – and private credit, specifically – is a strategic play, not a tactical one...

If you keep interest rates at this level, there will be folks who just can’t hang on.” – Randal Quarles, executive chairman, The Cynosure Group, former Fed vice chairman.

Featuring Charts

Chart of the Week: Steady as She Goes

June 11, 2024

Middle market direct lending spreads per unit of leverage consistently higher than large caps. Source: LSEG LPC(Past performance is no guarantee of future results.)

Read More

Chart of the Week: No Money Back Guarantee

June 4, 2024

Distributions to LPs are severely hampered by slower M&A activity since Covid. Source: Ares Management, Goldman Sachs(Past performance is no guarantee of future results.)

Read More

Chart of the Week: Different Tracks

May 29, 2024

Lower earnings activity is not always synchronized with worse economic performance. Source: Nuveen Multi-Asset, Bloomberg monthly S&P trailing 12 month EPS YoY; National Bureau of Economic Research Economic Recession Indicator from Jan ’54 Mar ‘24(Past performance is no guarantee of future results.)

Read More

Chart of the Week: No End to Extend

May 21, 2024

Repricings, refinancings, and extensions hit record volume in the BSL market. Source: PitchBook LCD(Past performance is no guarantee of future results.)

Read More

Chart of the Week: Reorg, Don’t Liquidate

May 13, 2024

Since the Fed’s rate hike regime began, more bankruptcies are reorganizations. Source: Torsten Slok – Apollo, The Daily Shot(Past performance is no guarantee of future results.)

Read More

Chart of the Week: Returns Department

May 7, 2024

Global private fund returns of capital has begun to improve since early 2023. Source: MSCI – Private Assets in Focus(Past performance is no guarantee of future results.)

Read More

Subscribe Now!

Join the leading voice of the middle market. Try us free for 30 days.

Click here to view the Newsletter sample.

What is the Lead Left?

  • One-stop source for deals and data
  • Market trend commentary and analysis
  • Exclusive interviews with thought leaders

Subscribe now

View Article By

Features

Middle Market & Private Credit – 6/10/2024

U.S. BDC Earnings, Credit Headwinds to Persist in 2024 Fitch-rated U.S. business development companies (BDCs) face persistent headwinds in 2024, with rising paid-in-kind (PIK) income and continued markdowns of investments during 1Q24 signaling additional credit issues and resultant net investment income (NII) pressure…. Login to Read More...

View Article

Leveraged Loan Insight & Analysis – 6/10/2024

What are middle market lenders top 3 concerns for the remainder of the year? Middle market lenders were asked in a recent LPC survey what are their top 3 concerns for the remainder of 2024…. Login to Read More...

View Article

PDI Picks – 6/10/2024

‘Grace period’ on road to net zero Private debt has new guidelines as it seeks credibility in its response to climate change. The Institutional Investors Group on Climate Change – formed in 2001 as a forum for collaboration between pension funds and asset managers on climate change issues – has published the first net-zero guidelines…

View Article

Private Debt Intelligence – 6/3/2024

Distressed debt leads Preqin’s performance forecasts Preqin forecasts that returns from private debt will remain steady up to 2028 at 9.8% per annum (a drop of just 0.1% from the 2019-2022 period). Direct lending returns are forecast to drop to 7.3% for 2022-2028, down from 8.6% for 2019-2022, reflecting a focus on more conservative loans…

View Article

Leveraged Loan Insight & Analysis – 6/3/2024

Boosted by refinancing activity, 1H24 sponsored loan volume at highest level since 2H21 Nearly US$300bn, 1H24 sponsored loan volume to date represents the largest half year total since 2H21 and a 56% increase over the same period last year…. Login to Read More...

View Article

Middle Market Deal Terms at a Glance

provided by

spp capital partners logo

 

Special Report: The Great Unwind

September 28, 2022

Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.

2022 Capital Market Outlook Report

February 3, 2022

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...

Special Report: Supply Chain Blues

January 6, 2022

Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.