Europe/US: Direct Lending Compared

Our fondness for colorful metaphors led us, in our 2016 series, to compare European direct lending to Burger King’s new hot dog venture. The burger giant’s thesis was to apply “sixty years of flaming-grilling expertise,“ but also recognized they’d have to “chop the onions a little differently.”

Apparently, hamburger prowess didn’t translate to frankfurters. They were pulled off the menu six months later.

Similarly, there are fundamental differences between US and European private credit markets. A recent survey in Private Debt Investor showed only 22% of private equity sponsors favored unitranche solutions, preferring bank loans instead….

▶︎ Read June 21 2021 newsletter: here

▶︎ Chart of the Week: here (by Capital Economics, Refinitiv, IHS Markit)

(Any “forward-looking” information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition Past performance is no guarantee of future results. Investing involves risk; principal loss is possible.)