Commentary

A Market in Full (First of a Series)

Of the many unanticipated consequences of Covid, one that caught our eye was the recent NYT headline: “Birds Thrived During Lockdowns.” Seems that while we were stuck at home last spring, our feathered friends were out partying. Urban areas, otherwise crowding out some species, saw hummingbirds and bald eagles return at 14 times pre-pandemic levels.

Supply Chain Blues (Last of a Series)

Last fall, the Harvard Business Review examined Covid’s impact on supply chains [link]. The pandemic, they wrote, “exposed vulnerabilities in the production strategies and supply chains of firms just about everywhere,” The study also presciently identified “the growing electronics content in modern vehicles” as a potential bottleneck. Today we are witnessing how the shortage of

Supply Chain Blues (Fourth of a Series)

Even in the ordinary course of business, private equity sponsors pay ruthless attention to the cost structures of their portfolio companies. It is a time-tested tool in sponsors’ kits and often on the first page of their due diligence playbook. Covid has simultaneously raised the bar and challenged buyers in managing all aspects of companies’

Supply Chain Blues (Third of a Series)

Before Covid the persistent view on private credit was too much capital was chasing too few deals. Transaction inflation caused compressed spreads, higher leverage and weakened terms. When Covid hit this balance shifted dramatically in favor of the investor. Deal supply dried up, lenders retreated, and terms strengthened. But within weeks central bank liquidity ended

Supply Chain Blues (Second of a Series)

Over the past 18 months it’s been fascinating to watch the divergent, often contradictory economic narratives in headlines and data. While the Delta variant created a surge of infections that in some states rivaled the original virus, capital markets continued their barnstorming ways. Even including its recent pullback, the Dow is up 5% since Delta

Supply Chain Blues (First of a Series)

We’ve all been there. You try to re-order your favorite beverage, sneaker, exercise bike, or cleaning product, and it’s out of stock. The dynamics behind these supply chain issues differ depending on the situation. Some manufacturers are still playing catch-up with consumer demand in areas such as home improvement and fitness. Others are challenged by

The State of Private Credit in Europe  (Last of a Series)

As we conclude our European private credit series, let’s review what we’ve learned so far: – Europe suffered a similar Covid slump (and enjoyed a similar rebound) as the US. Yet Europe also retained the country-by-country distinctions they had pre-Covid. The recovery in all capital markets was swift; deal volumes are now at record highs.