Both veterans and newcomers to the asset class are familiar with the basics of private debt benefits. Thanks to its premium yield over liquid credit and consistent returns across economic, rate, and market cycles, investors have moved briskly into non-traded credit since the GFC. Still, as we’ve seen and heard on several continents and at…
“Leveraged loan default rate rises to 14-month high in May” “US loan default rate hits 3-year high“ “Defaults in private credit averaged 5.9% in 1Q, law firm says” Everywhere you look these days industry rags are filled with talk about looming loan defaults. For anyone who’s been a practitioner or observer of the debt capital…
A frequent question from investors and others is, “When is a good time to invest in private credit?” What they mean is, “Is now a good time to invest in private credit?” Readers of this column know one of our consistent themes is private credit is not a timing thing. On a panel at the…
When we began our career in the middle market four decades ago, we could not have anticipated its transformation to private debt, the hottest asset class in capital markets. Back then being a lowly vice-president dedicated to smaller, non-public, non-rated, non-traded loans on the global syndicated finance desk at the great JP Morgan (then Chase…
We conclude our current private debt world tour with stops last week in Geneva and Zurich. As was the case with our previous visits in various overseas capitals, investors shared similar concerns about the world of volatile liquid markets and the relative stability and value in private markets. And as was the case with other…
“Private credit is the only bright spot in asset allocation right now.” The themes around private credit of consistent returns, valuation stability and low-risk portfolios were repeatedly underlined in the twenty or so meetings we had with investors in our weeklong trip around Seoul, South Korea. Fortunately conditions are increasingly propitious for both private credit…
Our APAC tour continued last week with a stop in Seoul, South Korea. There our investors, partners, associates, and friends were eager to hear our message on markets and how private credit fits into the current climate. Korea’s overhanging long-term geopolitical issue, according to local sources, is what to do with China. It’s an economic…
In our various overseas meetings over the past six months with institutional investors in the Middle East, Japan, UK, Germany, Belgium, Switzerland, Singapore and, most recently, Australia, consistent themes arise. The virtues of private credit are generally well appreciated, particularly in light of recent interest rates that have lifted all-in returns to historic highs. But…
In our continuing series on global private credit, we next cover the history and outlook for the asset class in Australia. In a visit to Melbourne and Sydney last week, we met with a number of clients and firms with exposure, appetite, or interest in private debt. What became clear in these conversations was how…
We conclude our special series on private market valuation myths with: Myth 3: Leveraged capital structures lead to conflicts of interest amongst private equity sponsors and lenders that can create negative outcomes and lower valuations. We asked Ron Kahn, Lincoln International’s valuation chief, to help parse this issue. “If you look at public company capital…