Business services: reliability amid volatility ‘Safe and steady’ is a tag that might be readily applied to the sector, and that’s just fine as far as investors are concerned. Alongside technology and healthcare, business services has emerged as a go-to sector for credit funders attracted by its reliable cashflows and sticky customer relationships. But unlike…
Claiming a bigger slice for alternatives A new study suggests its time for portfolio allocators to make some changes in the face of economic headwinds. A recent piece of analysis from KKR suggests that the classic 60/40 stocks/bonds portfolio construction model may have had its day in the face of a challenging new environment. The…
European deals buffeted by adverse backdrop Unitranche transactions in the region fell back in Q1 2022 as economic headwinds reverse the growth seen through 2021. In its latest MidCapMonitor, Houlihan Lokey recorded 103 unitranche deals in Europe during the first quarter of the year, down from 143 seen in the final quarter of 2021. Despite…
A subdued start to the year for capital raising The boom in senior debt fundraising subsided somewhat in the first quarter of the year, while North America remained the dominant region. Fundraising in Q1 2022 continued the very gradual downward trend of the past six years, according to Private Debt Investor data. However, given that…
Larger funds mean larger deals A new average fund size record was set in Q1 2022, as private debt managers become more ambitious at the larger end of the market. We’re in the era of the private debt mega-fund. Last year, according to Private Debt Investor data (see chart), the average fund size breached $1…
Placing a bet on litigation Litigation finance has found a way to attract the retail investor. On the face of it, litigation financiers are not obvious candidates to join the massed ranks of those queuing up to try and attract retail investment. After all, there are those who say you may as well place your…
Eyes turn to Asia-Pacific The region is attracting increasing interest (see chart), which extends beyond mainstream strategies to more niche areas. Europe is the place to avoid. That was the view of longstanding limited partner Tom Tull as he said that global turbulence marked a good time to carefully evaluate the weighting of geographic exposures….
Secondaries take off in wake of covid crisis Credit secondaries are a small but rapidly growing part of the asset class and recent events bode well for this niche market. In private markets, the development of healthy secondary transactions is perhaps one of the clearest indicators that an asset class has truly matured and become…
Testing times for leveraged loans Market conditions have been described as a ‘perfect storm’ as various pressures increase. Is something about to give in the financial markets? And if so, how would that affect leveraged loans? It would not be a stretch to be concerned about such a possibility, given recent geopolitical and capital markets…
Distress on the comeback trail In an increasingly turbulent and inflationary world, could an ‘old-fashioned’ wave of distressed debt be around the corner? The covid pandemic, inflation that now looks more long term than transitory, the promise of hikes in base rates, supply chain pressures, the conflict in Ukraine. The list may go on, though…