The proponents and beneficiaries of private capital have long recognized its virtue of being less correlated with headline risk than fixed income and public equities. But one of Covid’s most enduring financial legacies was the higher interest rate regime imposed by the Fed in 2022. While it appears their long-sought soft landing was achieved, more…
As we’ve noted, the banks and private credit managers occupy different places in the corporate finance ecosystem. That’s not to say, of course, that large corporate financings don’t represent real investment opportunities for the right buyers. Or that the expansion and evolution of private capital won’t lead to interesting and constructive solutions for a wide…
One of the frequent observations of private credit, usually couched as a complaint, is how many competitors are crowding into the asset class. In part this is due to the increasingly specialized strategies managers are employing that all fit into the PC classification. A few years back, we received a gift membership for a popular…
When you’re successful, everyone wants a piece of you. That’s the challenge private credit faces today. Its grown from a small, largely ignored corner of leveraged loans called the middle market two decades ago to an asset class rivaling both broadly syndicated loans and high-yield bonds. And now private credit is drawing attention from sophisticated…
This week we conclude our series on the private capital outlook for the year ahead with our fifth theme: “A breath of fresh air: Investing and fundraising in 2025.” As private capital’s virtuous cycle sets in motion, 2025 should present plenty of attractive investment opportunities across the capital stack. For senior debt investors, the direct…
Number four of our five themes for 2025: “Platform excellence: How managers will win business tomorrow.” Even as the liquidity squeeze loosens over the coming year, it’s clear that LPs are becoming ever-more selective in the managers they back. So, while private markets retain their appeal — nearly all (96%) of respondents to a recent…
Number three of our five themes for 2025: “Default position: Discipline and careful portfolio construction will keep portfolios clean.” There are clear reasons for a more bullish sentiment to take hold in private capital investment in the year ahead. A more certain macro backdrop, a decisive election result, US companies reporting above-expectation results, and the…
Next up is the second of our five themes for the year ahead: “A busier market: Providers of creative and flexible capital solutions will find favor.” As a brightening macro picture releases pent-up demand for private capital dealmaking – there was $2.6 trillion of dry powder among global buyout and venture capital firms waiting in the…
We now turn to the first of our five themes for the year ahead: “Still higher for longer: What slower rate cuts mean for private capital investors.” Let’s stipulate the Fed has pulled off the trickiest of landings: cooling down inflation while keeping the economy chugging along. With reference rates sliced by 100 bps from…
What we learned about 2024 is that many worries identified by analysts and market observers came to naught. Rates, economic growth, and inflation – all areas of concern last January – are in good shape as 2025 rolls out. More robust job growth than expected (see our Chart of the Week) is just one example….