Having moderated three private credit panels in the past ten days, a recurring theme is the record level of deal volume. What’s driving this unprecedented activity? In its recently published 3Q survey [link], William Blair reported $155.3 billion of institutional loans, nearly the highest number they’ve recorded. Almost 60% – $92.4 billion – was dedicated…
We report (in person!) this week from the SuperReturn Private Credit conference in Chicago, where we chaired day one, moderated an LP panel, and interviewed the keynote speaker. The event always attracts top-shelf credit investors and managers, and 2021 is no exception. Sifting through sentiments on the economy and markets from various panels, we discovered…
News reached us recently of a young walrus that had wandered south from his Arctic range in search of ice floes. Landing in Ireland, Wally began boarding luxury yachts. The property damage turned the whiskered wayfarer from “visiting celebrity to public enemy number one.” It all worked out, though, when a marine biologist enticed the…
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….
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…
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’…
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…
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…
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…
In a recent conversation with a good friend in private credit, a veteran of the industry for many years, he reminded us of the history of one-stop financing. “In the beginning,” he reminded us, “unitranche was a creature of broken markets. It was designed to step in when banks were backing away. Today it’s accelerating…