One criticism of private credit goes something like this: “Sure, private credit has a pretty good track record. But that’s because it’s never been tested by a real recession.”
The point is valid for most direct lenders. According to one study, only 5% of those managers were around before 2009. But during the past 16 years, all asset classes went through identical conditions. Regardless how “real” you consider Covid and its significant aftereffects, we’ve had a string of mini crises since the GFC: budget standoffs, supply chain disruptions, geopolitical events and now tariffs. Private credit steered through them with steadier values and returns.
Emerging threats today are the knock-on effects from tariff policies, including consumer confidence (near record lows) and recession risk. The latter has been validated by an unexpected 1Q US slowdown to -0.3%. The unpredictability of these policies has also led to pencils down for M&A mandates until a clearer trade picture emerges...
“It’s not completely irrelevant but there’s this big shock looming that hasn’t had time to be felt yet.” – Oliver Allen, US economist, Pantheon Macroeconomics.
Featuring Charts
Chart of the Week: Collateralized Loan Observations
Since the Fed began its rate hike regime in March 2022, MM CLO activity has grown. Source: PitchBook
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Chart of the Week: Poised for a Rebound?
Since the early 1800’s, tariff’s share of US government revenues has shrunk dramatically. Source: The Cato Institute
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Chart of the Week: What is a Tariff, Anyway?
Google searches for “tariff” hit a peak around Liberation Day but have trailed off since. Source: Google Trends
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Chart of the Week: Down Decade
Malaysia’s investment growth lags other ASEAN countries but shows signs of recovery. Source: Department of Statistics, Malaysia. Haver and respective national authorities
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Chart of the Week: Ringgit in the New Year
Malaysia’s economy grew 5.1% last year, ahead of 2023; 2025 is tariff-dependent. Source: Department of Economics, Malaysia
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Chart of the Week: Middle Market Breakdown
Despite other views, the middle market has three parts, each with their own features. Source: Churchill Asset Management
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Features
Middle Market & Private Credit – 5/19/2025
Fitch’s Privately Monitored Middle Market Portfolio Overview, 1Q25 Click here to learn more. As audits for privately monitored rating (PMR) issuers continue to roll in, Fitch forecasts revenue growth of 5.7% for 2024. Revenue growth for 2025 is likely to be pressured by rising U.S. tariffs and retaliatory measures. … Subscribe to Read MoreAlready a member?
PDI Picks – 5/19/2025
Can the asset class again prove its resilience? Delegates at the recent Europe Summit heard views on how different parts of the market will weather the challenges. Our recent Private Debt Investor Europe Summit drew LPs, GPs and advisers from all corners of the globe, keen to discuss a rapidly changing environment and what they…
Middle Market & Private Credit – 5/12/2025
Fitch’s Privately Monitored Middle Market Portfolio Overview, 1Q25 Click here to learn more. In the charts above, Fitch presents aggregate data for issuers in its privately monitored rating (PMR) portfolio. Fitch privately rates these issuers on behalf of asset managers…. Subscribe to Read MoreAlready a member? Log in here...
Leveraged Loan Insight & Analysis – 5/12/2025
Proportion of US loans trading north of par edges up modestly following headline volatility In the wake of headline making talk of tariffs – and implicitly fears of a trade war – in April US loan investors pulled back in the secondary causing average bids to come off highs before showing signs of a modest…
The Pulse of Private Equity – 5/12/2025
Global private debt dry powder ($B) Download PitchBook’s Report here. Halfway through 2024, private debt dry powder sat at $566.8 billion—a new high—and is on track for its second consecutive year of growth…. Subscribe to Read MoreAlready a member? Log in here...
Middle Market Deal Terms at a Glance
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
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. … Subscribe to Read MoreAlready a member? Log in here Related posts: 2H 2021 Midyear Outlook Report State of the Capital Markets – Fourth Quarter 2016 Review and
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
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